Suppose the market demand and market supply for coffee is given by the following equations: Qd = 850 – 15P Qs = 400 + 30P

A. Find quantity demanded and quantity supplied when the price of coffee is    Rs. 8. Is there a surplus or shortage in the production of coffee? What    should happen to the price of coffee? B. Find the equilibrium price for coffee by using given demand and supply    equations. C. Prove that the price found in part (B) is an equilibrium price.

D. Show the equilibrium condition in coffee market graphically.




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