Suppose we have two supply and demand functions as follows D(p)S(p)=20−2p,=−10+2p, where p is the price per unit. What is the supply at the equilibrium point?

Qs=5

Explanation:

Demand function:Qd=20-2P

Supply function:Qs=-10+2p

Based on the market equilibrium condition,we can state:-

Qd=Qs

20-2P=-10+2p

-2P-2P=-10-20

-4P=-30

4P=30

P=30 /4

P=7.5

Hence,the equilibrium price in the market is 7.5

Now,plugging the value of P or equilibrium price into the demand function,we obtain:-

Qd=20-2(7.5)

Qd=20-15

Qd=5

The equilibrium quantity in the market is 5

Now,plugging the value of P or equilibrium price into the supply function,we obtain:

Qs=-10+2P

Qs=-10+2(7.5)

Qs=-10+15

Qs=5

answerboth the short run phillips curve and the aggregate demand and aggregate supply model