passwella.
Menu

JAMB Economics 1997 Question 15

Question 15

Price Determination

Given a market demand curve Q = 120 − 2p and a supply curve Q = 4p, the equilibrium price and quantity respectively are

  1. A.20 and 80
  2. B.30 and 120
  3. C.40 and 60
  4. D.60 and 240
Show the answer and explanation

Answer: A (20 and 80)

Explanation

At equilibrium 120 − 2p = 4p, so 6p = 120 and p = 20. Quantity = 4 × 20 = 80.