There are 5000 identical individuals in the market for good X and the demand

function is Qdx=120-20Px ceteris paribus and 500 identical producers of commodity

X each with a function given by Qsx=20Px ceteris paribus.

a. Find the equilibrium value of price and quantity.

b. If there is an increase in consumer income and new demand curve is Qdx=15000-

2000Px. Derive the new market demand schedule and then state the new

equilibrium for price and quantity.