ECON6000 Economic Principles and Decision Making Module 1 - Assessment 2

Problem B:

At a local market in Industria, the following demand and supply information are given:
Demand for energy bars: P = 800 − 2QD
Supply for energy bars: P = 200 + 1Qs
1. What are the market equilibrium price and quantity?
2. If the subsequent price increases by $1, how does demand and supply change? Explain with the help of the concepts of the law of demand and supply.