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Suppose that the total market demand for a product consists of the demands of

individual 1 and individual 2. The demand equations of the two individuals are given by the following equations:

QD,1 =20-2P and QD,2 =40-8P

Page 1

Suppose that the total market supply is given by the equation:

QS =-10+2PWhat are the market equilibrium price and quantity?

Answer: Q* = 5, P* = 7.5

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