Question 29
MediumOriginal questionDemand is Qd = 100 − 10P and supply changes from Qs = 10P − 20 to Qs = 10P − 40 after a rise in input costs. What is the new equilibrium?
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
100 − 10P = 10P − 40, so 20P = 140 and P = ₹7.
Q = 100 − 70 = 30: price up, quantity down after a decrease in supply.
- Concept
- Decrease in supply, solved
- Typical timeTypical
- 70 s
- Your timeYours
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