ECO402 Assignment Solution

Solution:

Qd=Qs
Qs=850-25P
Qs=500+45P
As We Know Qd=Qs
So
850-25P=500+45P
850-500=45P-25P
350=20P
P=350/20
P =17.5
Qs=500+45P
Qs=500+45(17.5)
Qs=500+787.5
Qs=1287.5
As we know Qs=Qd For equilibrium

So it will be at 1287.5

Qd=Qs
850-25p=500+45P
850-500=45p+25P
350=70P
P=350/70
P=5 (equilibrium price)
Now,
Putting the value of P in eq 1, we will get the equilibrium quantity,
Q=500+45(5)
Q=500+225
Q=725 per bushel