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Suppose QD = 10 p and QS = 2 + 2p
a) Find equilibrium quantity and price.
b) Suppose demand and supply shift simultaneously and now the new demand and supply functions are Q0D = 14 p and Q0S = 4 + 2p: Find the new equilibrium price and quantity
c) Under the initial equilibrium price (that is, under the equilibrium price you found in part a), what is the magnitude of excess demand/supply after the demand and supply shift simultaneously? Show your work.
d) If only demand shifts (supply remains as in part a), what would be the magnitude of excess demand/supply under the equilibrium price you found in part a.
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