Skip to main contentSkip to solution

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

QD={350−pfor 0≤p≤3500for p>350Q_D = \begin{cases} 350 - p & \text{for } 0 \leq p \leq 350 \\ 0 & \text{for } p > 350 \end{cases}

QS={220+pfor p≥100for 0≤p<10Q_S = \begin{cases} 220 + p & \text{for } p \geq 10 \\ 0 & \text{for } 0 \leq p < 10 \end{cases}

Where QDQ_D and QSQ_S denote the demand for and supply of salt (in kg) respectively and pp denotes the price of salt per kg in rupees.

If the demand for salt increases supply remains the same and the new demand curve is

QD=400−pQ_D = 400 - p

What will be the new equilibrium price and quantity?

Solution

✅ Correct Option: 1

Solution Coming Soon

Keyboard Shortcuts

  • Left arrow: Previous question
  • Right arrow: Next question
  • S key: Jump to solution
  • Q key: Jump to question