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    Equilibrium Price and Market Demand of Frozen Yogurt

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    The Market Demand for Joy's Frozen Yogurt is given as:

    Qd=-100P+1.5Phd-5Psd+20A+15Pop

    Where Qd= Annual demand for frozen yogurt

    Phd= Price of hot dogs
    Psd= Price of soft drinks
    A= Advertising expenditures
    Pop= Percentage of the population

    Considering the demand equation of QD=-100p+700,and assuming that the supply equation is given as Qs=-100+100P,how do you find the equilibrium price and quantity? If the producer is given a $2 subsidy, how do you find the new equilibrium price and quantity?

    © BrainMass Inc. brainmass.com October 10, 2019, 12:51 am ad1c9bdddf
    https://brainmass.com/economics/demand-supply/equilibrium-price-market-demand-frozen-yogurt-310725

    Solution Preview

    At equilibrium the quantity demanded is equal to the quantity supplied. Therefore:
    Qd = -100 P + ...

    Solution Summary

    This solution calculates the equilibrium price based on supply and demand curves. It also calculates the revised equilibrium based on a subsidy.

    $2.19