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Assume the demand function for scooters is given by QD=20000 - 10P + 0.2i where P=the price of the scooter, and I=the average of income of consumers. Also, assume the supply function of scooters is given by QS=20P. If the market for scooters is perfectly competitive, and the average income for consumers is $20,000, what are the equilibrium price and quantity in this market?
a. The equilibrium price is $16000, and 800 scooters are traded.
b. The equilibrium price is $1,600 and 32,000 scooters are traded.
c. The equilibrium price is $1000, and 10,000 scooters are traded.
d. The equilibrium price is $800, and 16000 scooters are traded.
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