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 ```please decide true of false of the statements and also give the explain: if the demand and supply functions for a good as follows: Q(D)= 900-60p and Q(S)=-200+50P statement1: the equilibrium price is \$12 while the equilibrium quantity is 300. statement 2: if the supply is constant, but an increase in income cause customers to be willing and able to buy 220 more units at each price than previously, the new equilibrium price will be \$12 and the new equilibrium quantity will be 400.```
 ```Statement 1. Q(D) describes the demand for the product at a given price. Q(S) describes the supply of the product at that price. The demand and supply are in equilibrium if the demand equals the supply: Q(D) = Q(S) 900-60 P = -200 + 50 P 1100 = 110 P P = 10 Hence, the equilibrium price is 10, and not 12 (so statement one is false). On the other hand, the equilibrium quantity is now: Q(D)=Q(S)= 900-60P = 900-600 = 300 Thus, the equilibrium quantity is indeed 300. Statement 2: Now we have Q(D) = 900-60P + 220 = 1120-60P To find the equilibrium, we set: Q(D)=Q(S) 1120-60P = -200+50P 1320 = 110 P P=1320/110 = 132/11 = 12 The new equilibrium quantity is: Q(S) = 1120-60*12 = 1120-720 =400 So that statement two is true. ---------------- Links: http://faculty.babson.edu/aieta/exclcmpn/Ec_1/Ec_1_7/ec_1_7.htm Search stategy: supply demand function equilibrium```