Given two substitute goods (X and Y) with demand and supply function;
Qd = 7p – 12
Qs = 4p + 9
Find the magnitude of excess demand when p = ₦18
- 303
- 30
- 114
-
33
The correct answer is: D
Explanation
To find quantity demanded when p = ₦18
Qd = 7p - 12
7(18) - 12
126 - 12
Qd = 114units
To find quantity supplies at ₦18
Qs = 4p + 9
4(18) + 9
Qs = 72 + 9
Qs = 81 units
To find the magnitude of excess demand
Excess demand = 114 - 81 = 33 units