Subjects economics

Equilibrium Price Quantity 3E5359

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1. **Problem Statement:** Find the equilibrium price and quantity for the commodity with supply function \(P_s = Q^2 + 6Q + 9\) and demand function \(P_d = Q^2 - 10Q + 25\). 2. **Formulas and Rules:** The market equilibrium occurs where supply equals demand, i.e., \(P_s = P_d\). 3. **Set the equations equal:** $$Q^2 + 6Q + 9 = Q^2 - 10Q + 25$$ 4. **Simplify by subtracting \(Q^2\) from both sides:** $$6Q + 9 = -10Q + 25$$ 5. **Bring all terms to one side:** $$6Q + 10Q = 25 - 9$$ $$16Q = 16$$ 6. **Solve for \(Q\):** $$Q = \frac{16}{16} = 1$$ 7. **Find equilibrium price by substituting \(Q=1\) into either function:** Using supply function: $$P_s = 1^2 + 6(1) + 9 = 1 + 6 + 9 = 16$$ 8. **Interpretation:** The equilibrium quantity is \(Q=1\) and the equilibrium price is \(P=16\). 9. **Graphical check:** Both curves intersect at \(Q=1, P=16\) over the interval \(0 \leq Q \leq 5\). **Final answer:** Equilibrium quantity \(Q=1\), equilibrium price \(P=16\).