ECON-301/ch2S and Danalysis29a

Question 3
Suppose demand is given by Qd = 400 – 15P+ I, where Qd is quantity demanded, P is price and I is income. Supply is given by Qs = 5P, where Qs is quantity supplied. When I = 200, equilibrium quantity is

$$\begin{align} Qd & = 400 – 15P+ I \\ Qs & = 5P \\ \therefore 5P & = 400 - 15P + I \\ \mbox{if } I & = 200 \\ \mbox{then } 5P & = 400 - 15P + 200 \\ 5P + 15P & = 400 + 200 \\ 20P & = 600 \\ P & = 30 \end{align} $$