CA Foundation · Quantitative Aptitude · Equations
The demand for a product is q = 120 − 4p and the supply is q = 20 + 6p, where p is price in rupees. What is the equilibrium quantity?
The equilibrium quantity is 80 units. Equating 120 − 4p with 20 + 6p gives p = 10, and substituting back gives q = 80 from both curves. The figure 10 is only the equilibrium price.
- A10
- B60Correct
- C80
- D40
Explanation
Set demand = supply: 120 − 4p = 20 + 6p, so 100 = 10p and p = 10. Quantity = 120 − 40 = 80? Check: 120 − 4(10) = 80, and 20 + 6(10) = 80. So quantity is 80; the value 10 is the price.
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