Y7

Market Equilibrium: Consider a market where market demand is given by QD(P) = 100 - 5P and market supply is given by Qs(P) = 20+ P. a. Find the equilibrium market price and quantity sold. b. Using the model of supply and demand, what would happen to the market if many consumers lost their jobs or had to take reductions in wages/salaries? Illustrate the effect on the market graphically, and discuss how you would expect equilibrium quantity and price to change