Supply and Demand 1 answer below »

Assume that demand for a commodity is represented by the equation P= 10 – 0.2Qd and supply by the equation P = 2 + 0.2Qs, where Qd and Qs are the quantity demanded and quantity supplied, respectively, and P is price. Using the equilibrium condition Qs = Qd, solve the equations to determine price. Now determine equilibrium quantity. Graph the two equations to substantiate your answers. a. Label the curve that is most likely a demand curve. Explain your choice. b. Label the curve that is most likely a supply curve. Explain your choice. c. What is the equilibrium price and quantity? Choose price points above and below that price and explain why each is not the equilibrium price.