Consider the market for Good X
Suppose that consumers do not buy any of Good X at the price of $120, and for every $10 decrease in price, the quantity consumed increases by 20. Write the equation for the demand curve of Good X.
Suppose the producers do not produce any of Good X at the price of $50, and for every $10 increase in price, the producers increase the quantity produced by 30. Write the equation for the supply curve of Good X.
- Find the equilibrium price and quantity.
- At what price does this market have a shortage of 40?
- At what price does this market have a surplus of 60?