Quantitive Problem
Use the table to answer the equations listed. Suppose the demand function for a new
smartphone can be expressed as QD = 1000 – 1.5P with being quantity demanded and P
being price. The supply function can be expressed as QS = 50 + 2P
Quantity
Demanded Price Quantity
Supplied Surplus Amount or Shortage
Amount 200
220
240
260
280
300
320
340
1. What is the equilibrium price? Please compute this either using Microsoft Excel,
or by using algebra from the equations above and solving for a price where
quantity supplied equals quantity demanded. Provide a thorough detail of your
work by either showing the algebra steps or by showing how you used Excel to
calculate.
2. Suppose the supply function changes to 100 + 2P. What is the new equilibrium? Show
your work by either showing the algebra steps or by showing how you used Excel to
calculate.
