**Finding the Equilibrium Price for a Good: A Step-by-Step Guide**When analyzing the supply and demand for a good, the equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers. Given the supply and demand equations below, we can determine the equilibrium price through a straightforward process.### Supply and Demand EquationsThe quantity demanded (\(Q_d\)) and the quantity supplied (\(Q_s\)) for a good are given by the following equations:\[ Q_d = 50 - 2P \] \[ Q_s = 9 + 3P \] ### Finding the Equilibrium PriceTo find the equilibrium price, we need to set the quantity demanded equal to the quantity supplied and solve for \(P\). Follow the steps below to achieve this:1. **Write Down the Equations:** \[ Q_d = 50 - 2P \] \[ Q_s = 9 + 3P \]2. **Set the Demand Equation Equal to the Supply Equation:** \[ 50 - 2P = 9 + 3P \]3. **Solve for \(P\):** - Combine the like terms involving \(P\) on one side: \[ 50 - 9 = 3P + 2P \] - Simplify the terms: \[ 41 = 5P \] - Solve for \(P\): \[ P = \frac{41}{5} \] \[ P = 8.2 \]Thus, the equilibrium price for the good is \(P = 8.2\).### Multiple-Choice Question ExplanationNow, let's consider the multiple-choice options related to finding the equilibrium price:A. **The number in front of the \(P\) in the demand equation represents the price of the good.** - This statement is incorrect. The number in front of \(P\) (\(-2\)) in the demand equation represents the sensitivity (or elasticity) of the quantity demanded to changes in price, not the price itself.B. **Set the quantity demanded in the demand equation equal to zero and solve for price.** - This statement is also incorrect. Setting the quantity demanded to zero will not find the equilibrium price. It will only tell us the price at which consumers demand zero units of the good.

Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Suppose the supply and demand for a good are given by the following equations: Qd = 50 – 2P Q = 9+ 3P How would you find the equilibrium price for this good? O A. The number in front of the P in the demand equation represents the price of the good. B. Set the quantity demanded in the demand equation equal to zero and solve for price. C. Set the demand equation equal to the supply equation and solve for price. D. Set the quantity supplied in the supply equation equal to zero and solve for price.

Suppose the supply and demand for a good are given by the following equations: Qd = 50 – 2P Q = 9+ 3P How would you find the equilibrium price for this good? O A. The number in front of the P in the demand equation represents the price of the good. B. Set the quantity demanded in the demand equation equal to zero and solve for price. C. Set the demand equation equal to the supply equation and solve for price. D. Set the quantity supplied in the supply equation equal to zero and solve for price.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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