Calculate the equilibrium price for golf clubs and the equilibrium quanity sold

ID: 1093119 • Letter: C

Question

Demand function: Q=240-1.00P

Supply Function Q=1.00P

So, I was able to determine that the equlibrium price is $120 per club and the equlibrium quanity sold is 140 thousand golf clubs.

By question is based on the second part which states.

Suppose that the golf club dealer deciedes to charge a price of $140 per club

This would result in _____ of _____ thousand clubs.

The first blank should be "surplus" but I dont know how to calculate how much of a surplus this change will cause.

Can someone please explain how to calculate the surplus amount?

Thank you!

Demand function: Q=240-1.00P

Supply Function Q=1.00P

If p = $140

Then Q = 240 - (1)(140) = 100 Quanity demanded

Supply will be Q = 1(140) = 140 supplied.

Surplus = qty supplied - qty demanded = 140 - 100 = 40

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