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Qd = 850 – 15P
Qs = 400 + 30P

Muhammad Soban

0333-7637637

Solution:

Coffee Price = 8. Rs/

Qd = 850 – 15P

= 850 – 15 ( 8 )

= 850 – 120

Qd = 730

Qs = 400 + 30P

= 400 + 30 ( 8 )

= 400 + 240

Qs = 640

 Shortage in the production of coffee.

 Shortage causes price of the coffee to

Solution B:
Equilibrium price

Qd = Qs

850 – 15P = 400 + 30 P

850 – 400 = 30P + 15 P

450 = (30 + 15) P

450 = 45P

P = 450 / 45

P = 10

Equilibrium price = 10

Solution C:

850 – 15P = 400 + 30 P

Putting the equilibrium

850 - 15(10) = 400 + 30(10)

850 – 150 = 400 + 300

700 = 700

10. Rs are an equilibrium.

Solution D:

Putting different prices in equations

Qd = 850 – 15P
Qs = 400 + 30P

Prices Qd = 850 – 15P Qs = 400 + 30P

6 Qd = 850 - 15(6) = 760 Qs = 400 + 30(6) = 580
8 Qd = 850 - 15(8) = 730 Qs = 400 + 30(8) = 640
10 Qd = 850 - 15(10) = 700 Qs = 400 + 30(10) = 700
 12 Qd = 850 - 15(12) = 670 Qs = 400 + 30(12) = 760
14 Qd = 850 - 15(14) = 640 Qs = 400 + 30(14) = 820

D.C

P = 10 E

S.C

Muhammad Soban

0333-7637637

0 Qd = 700 X