Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

Given qD = 2,000 –-p and qS = 200 + 2p. What will be the algebraic expression for excess demand?

Options:

3p-1800

1800 -3p

2p-600

3p-1600

Correct Answer:

1800 -3p

Explanation:

Excess demand is demand minus supply.

So, Qd –- Qs = 2000 - p –- (200 + 2p)

=2000 - p - 200-2p

= 1800 –-3p.

At equilibrium price, this excess demand will be zero. In given question, equilibrium price n calculation will be 600. Putting p = 600 in excess demand equation of 1800 –- 3p, we get zero excess demand.