Market Demand and market supply equations are given as:
q_D = 200 – p
q_S = 120 + p
Equilibrium price and quantity are?

40, 160

The correct answer is option 3: 40, 160

Step 1: Solve for equilibrium price

Equating Q_d and Q_s, we get Equilibrium Price

200 – p = 120 + p

200 – 120 = p + p

80 = 2p

40 = p

Thus, Equilibrium Price = 40

Step 2: Find equilibrium quantity

Substituting p=40 in the demand equation:

Q_d =200 – p 

     = 200 – 40

     = 160

Thus, the equilibrium price is 40, and the equilibrium quantity is 160.