Quantity supplied = -40 + 2p
Equilibrium is attained at a point where market demand is equal to market supply, i.e. Quantity demanded = Quantity supplied
Hence, 160 - 2p = -40 + 2p
160 + 40 = 2p +2p
$200=4\text{p,p}=\frac{200}{4}=50$
Hence, equilibrium price =₹ 50 Equilibrium quantity will be,
Quantity demanded = Quantity supplied
= 160 - 2p = 160 - 2 × 50
= 160 - 100 = ₹ 60
Let us take at price ₹ 20
p = ₹ 20 Quantity demanded = 160 - 2p
= 160 - 2 × 20 = 160 - 40
= ₹ 120 Quantity supplied = - 40 + 2p
= - 40 + 2 × 20 = -40 + 40 = 0
Quantity demanded > Quantity supplied [excess demand] Also it can be concluded that at ₹ 20 there will be no supply of the commodity, hence between 20 < p < 50, there will be excess demand.
Let us take at price ₹ 80
Quantity demanded = 160 - 2p
= 160 - 2 × 80 = 160 - 160 = 0
Quantity supplied = -40 + 2p
= -40 + 2 × 80 = -40 + 160 = 120
Quantity demanded < Quantity supplied [excess supply]
Also, it can be concluded that at p = ₹ 80 demand will be zero, hence there will be excess supply between 50 < p < 80.
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| Output (Units) | 1 | 2 | 3 | 4 | 5 | 6 |
| Average Revenue (Rs.) | 20 | 20 | 20 | 20 | 20 | 20 |
| Total Cost (Rs.) | 22 | 42 | 60 | 76 | 96 | 120 |
| ₹ in crores | ||
| (i) | Compensation of employees | 250 |
| (ii) | Mixed income of self-employed | 600 |
| (iii) | Profit | 80 |
| (iv) | Rent | 30 |
| (v) | Interest | 40 |
| (vi) | Net factor income to abroad | (–) 10 |
| (vii) | Net exports | 15 |
| (viii) | Consumption of fixed capital | 20 |
| (ix) | Net indirect taxes | 10 |
| (x) | Net current transfers to abroad | 8 |