I have the following problem :
The demand function of a good is qD=2000-4P and the supply function is qS=5P+200.
a) Find equilibrium price and quantity.
b) Buyers receive a government subsidy of 50 for every good bought. Find the new equilibrium price and quantity.
Solution for a) 2000-4P=5P+200 P=200 Q=1200
Solution for b) 2000-4(P-50)=5P+200
9P=2000 P=222.22 Q=1311.11
Could anyone please show me how we get Q=1200 at a) and how we get to P=222.22 therefore Q=1311.11 at b).
Your help would be greatly appreciated!
The demand function of a good is qD=2000-4P and the supply function is qS=5P+200.
a) Find equilibrium price and quantity.
b) Buyers receive a government subsidy of 50 for every good bought. Find the new equilibrium price and quantity.
Solution for a) 2000-4P=5P+200 P=200 Q=1200
Solution for b) 2000-4(P-50)=5P+200
9P=2000 P=222.22 Q=1311.11
Could anyone please show me how we get Q=1200 at a) and how we get to P=222.22 therefore Q=1311.11 at b).
Your help would be greatly appreciated!