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JAMB Economics 2008 Question 15

Question 15

Price Determination

Use the information below to answer questions 15 and 16. Given that Qd = 20 − 4P and Qs = 6P + 12.
Determine the equilibrium quantity

  1. A.14.2
  2. B.16.8
  3. C.20.8
  4. D.30.2
Show the answer and explanation

Answer: B (16.8)

Explanation

Set 20 − 4P = 6P + 12, so 10P = 8 and P = 0.8. Then Q = 20 − 4(0.8) = 16.8.