Suppose the demand and supply curves of coffee are given by: qD = 1,000 – p, qS = 700 + 2p Calculate equilibrium quantity.

790 800 900 810

900

At equilibrium, market supply = market demand. Equating them, we get 1000-p = 700+ 2p 1000-700 = 2p + p 300 = 3p 100 = p Putting p = 100 in any equation, we get q = 1000-p = 1000-100 = 900. So equilibrium quantity is 900.