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Question 1: If the demand and supply curve for computers are:
D = 100 - 6P, S = 28 + 3P
where P is the price of computers, what is the quantity of computers bought and sold at equilibrium.
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Answer: We know that the equilibrium quantity will be where supply meets, or equals, demand. So first we'll set supply equal to demand:
100 - 6P = 28 + 3P
If we re-arrange this we get:
72 = 9P
which simplifies to P = 8.
Now we know the equilibrium price, we can solve for the equilibrium quantity by simplying substituting P = 8 into the supply or the demand equation. I'll substitute it into the supply equation:
S = 28 + 3*8 = 28 + 24 = 52.
Thus the equilibrium price is 8, and the equilibrium quantity is 52.
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