Use the information below to answer this question.
Given that Q d = 20 – 4P and Q = 6P + 12
Determine the equilibrium quantity
- 14.2
-
16.8
- 20.8
- 30.2
The correct answer is: B
Explanation
Q d = 20 - 4P and Q = 6P + 12
Qd = Qs
20 - 4p = 6p + 12
20 - 12 = 8
6p + 4p = 10p
p = 8/10 = 0.8
Substitute '0.8' in Qd equation. Hence we will have
Qd = 20 - 4 (0.8)
Qd = 20 - 3.2 = 16.8