Question: Suppose demand and supply are given by Qd = 14 -1/2P and Qs = 1/4P - 1.
1) What are the equilibrium quantity and price in this market? Show your work?
Hint:
A) Draw the demand and supply graph and label all initial points ( D0, S0, P0, E0), following the use of comparative statics given your text on pages 62-65)
B) Set demand equal to Supply and solve the values. See page 62 for a practice problem
C) Next, insert the values in the graph.