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Economics Assume that the U.S. oil demand is represented by the following demand function: P d = 40 - 0.15 q d and the supply
Economics
Assume that the U.S. oil demand is represented by the following demand function:
Pd= 40 - 0.15 qd
and the supply curve (which represents the domestic oil producers) is:
Ps= 5 + 0.10 qs
where Pdand qdare price and quantity demanded, respectively. In addition, Psis the price charged by domestic suppliers and qsis the quantity supplied.
Find the equilibrium price in the market for oil in the autarky without any considerations for national security or environmental externalities.
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