If the demand curve for wheat in the Untied States is P=12.4-Qd where P is the farm price of wheat (in dollars per bushel) and Qd is the quantity of wheat demanded ( in billions of bushels), and the supply curve for wheat in the United States is P= -2.6 + 2Qs where Qs is the quantity of wheat supplied ( in billions of bushels), what is the equilibrium price of wheat? What is the equilibrium quantity of wheat sold? Must the actual price equal the equilibrium price? Why or why not?
You want to find the points P* and Q* at which both functions intersect.
You have two equations
P= -2.6 + 2Qs (2)
at equilibrium Qd = Qs
If P= -2.6 + 2Qs, you are going to substitute this into ...
This step-by-step solution walks the student through calculations for equilibrium price and quantity in the market.