Suppose demand and supply are given by qd = 60 - p and qs = 1.0p - 20.
a. what are the equilibrium quantity and price in this market?

Equilibrium is the place in the market where there is no trend for change. Buyers’ and sellers’ plans accord, and consequently quantity demanded equals quantity supplied. Now when we have a supply function and a demand function, we already know quantity demanded and supplied in terms of price. We can therefore use these functions to find what price causes quantity demanded and quantity supplied to meet, which is where there is no excess demand or excess supply. Recall that the demand function was QD = 60 - P, and that the supply function was QS = 1.0P – 20.

Now we will isolate the "P" term, so we can solve for equilibrium price.

To determine the equilibrium price:

qd = 60 - p  = 1.0p – 20 = qs

60 + 20 = P + P

80 = 2P

40 = P

Notice that since at P = 40, both quantity demanded and quantity supplied are the same simply because of the definition of equilibrium, we can find the quantity traded in the market by using either the demand or the supply function. In this case, use the demand function. To find equilibrium quantity, we simply plug the equilibrium price into the demand function:

Qd = 60 – P

= 60 – 40

Qd = 20

answer; /// the above statement is (true);

answer; capital structure decision;