1. Assume demand is equal to supply where:

Demand Function: 20,000 - 40P

Supply Function: 4,000 + 60P

What is the equilibrium price?

2. Based on question No. 1, prove that your computed P* is correct by determining the equilibrium quantity (Q*)

What is your Q*?

3. Based on No. 1 assumption that Qd = Qs, if the prevailing price in the market is 100, how many units arequantity demanded?

4. Based on No. 1 assumption, if the prevailing price in the market is 100, how many units arequantity supplied?

5. What is the market condition if Qd is greater than (>)Qs?

6. Based on the assumption of question No. 1, if the prevailing price in the market is 200, how many units are quantity demanded?

7. Using the assumption in question No. 1, if the prevailing price in the market is 200, how many units are quantity supplied?

8. What is the market condition if Qd is lesser than (<) Qs?