The market demand curve and the market supply curve of wheat are given by:
qD = 450 – p for 0<p<450
qS = 150 + p
There will be excess demand at?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Price= 100
Equilibrium price will be calculated as 450-p=150+p.
Solving this, equilibrium price = 150.
At any price less than equilibrium price, there is excess demand.
First option shows price = 100 which is less than 150. So it is the answer.