Use the information below to answer this question.
Given that Q d = 20 – 4P and Qs = 6P + 12
If price is increased to N3, how much is the excess supply?
- 30
-
22
- 12
- 8
The correct answer is: B
Explanation
Given that Qd = 20 - 4P and Qs = 6P + 12
To solve for excess supply, we will have to substitute '3p'' into both sides of the equation. Hence we have;
Qd = 20 - 4(3) and Qs = 6(3) + 12
20 - 12 = 8
18 + 12 = 30
30 - 8 = 22