Write short notes on Market Equilibrium.
(6 marks)
b) Using the following demand and supply functions of a commodity x, compute the
equilibrium price and quantity.
Qd = 100 – 2P

Qs = 40 + 4P (4
marks)
c) Ceteris paribus, use diagrams to illustrate and explain the effects on the values
in (b) from:
i) a fall in price of x’s substitute. (4
marks)
ii) a simultaneous increase in input prices and a rise in the consumer’s income.

(6 marks)