The market demand curve and the market supply curve of a good are given by:

q_D = 450 – p for 0<p<450

q_S = 150 + p

What will be the equilibrium quantity?

300

The correct answer is Option 3: 300

Since at equilibrium price market clears, we find the equilibrium price by equating market demand and supply and solve for p.

450-p = 150+ p

300 = 2p

150 = p

Putting p=150 in any equation, we get

q = 450 – p

q= 450 – 150

q= 300.