Suppose the demand and supply curves of a Commodity-X is given by the following two
equations simultaneously:
Qd = 200 – p Qs = 50 + 2p
i) Find the equilibrium price and equilibrium quantity.
ii) Suppose that the price of a factor of production producing the commodity has
changed, resulting in the new supply curve given by the equation
Qs’ = 80 +2p
Analyse the new equilibrium price and new equilibrium quantity as against the
original equilibrium price and equilibrium quantity.

i) We know, in equilibrium:
Qd = Qs 200-p = 50+2pp= Rs 50

By substituting value of p in Qd, we get:
Qd =200-50= 150 units

ii) When price of factor changed, the new supply curve is
Qs'= 80+2p
To calculate new equilibrium price and quantity, we equate
Qd = Qs'
200-p = 80 + 2pp = Rs 40
By substituting the value of p in Qd, we get:
Qd = 200-40 = 160 units

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(i)QD=QSwe know this then
p=150 is the equillibrium price
therefore p=5 is the new equilibrium price
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