## Market equilibrium - numerical

#### Question 1

For a linear demand function of Qd = 155 - 5P, calculate the values of quantity demanded for prices from $1 to $20.

#### Question 2

For a linear supply function of Qs = -25 + 10P, calculate the values of quantity supplied for prices from $1 to $20.

#### Question 3

Plot the demand and supply diagram for the values for quantity demanded and supplied calculated in questions 1 and 2.

#### Question 4

Using simultaneous equations calculate the equilibrium price and output. *Show your working*.

#### Question 5

The demand function changes to Qd = 125 - 5P.

- Calculate the new values for quantity demanded for prices from $1-$20.
- Calculate the new equilibrium price and output using simultaneous equations
- Plot the new demand curve as D2 on the demand and supply diagram. Use the diagram to confirm your answers to part (b).

#### Question 6

The supply function now changes to Qs = -15 + 15P.

- Calculate the new values for quantity supplied for prices from $1-$20.
- Calculate the new equilibrium price and output using simultaneous equations
- Plot the new supply curve as S2 on the demand and supply diagram. Use the diagram to confirm your answers to part (b).

#### Question 7

Suggest two reasons for:

- The change in the demand function from Qd = 155 - 5P to Qd = 125 - 5P.
- The change in the supply function from Qs = -25 + 10P to Qs = -15 + 15P.