Economics

Find market equilibrium

What happens to a market when buyers want 20 more units at every price?

Equilibrium is where quantity demanded matches quantity supplied. A shift in the whole demand curve changes that crossing.

If Qd = a − 2P and Qs = b + 3P, then P* = (a − b) ÷ 5
Set 100 − 2P equal to 20 + 3P. Rearrange to 80 = 5P, so P is ₹16. Put ₹16 into either curve to get 68 units.
With a = 100 and b = 20, price is ₹16. Both curves give 68 units. At ₹10, buyers want 80 units and sellers offer 50, leaving a shortage of 30.
Set 100 − 2P equal to 20 + 3P. Rearrange to 80 = 5P, so P is ₹16. Put ₹16 into either curve to get 68 units.

If a rises from 100 to 120 and b stays 20, what is the new equilibrium?