The following relations describe demand and supply. Qd

The following relations describe demand and supply.

Qd = 30,000 – 100P

Qs = -10,000 + 100P

Where P is price in dollar and Q is quantity in unit.

What does demand curve and supply curve represent respectively? Why is demand curve negatively sloped whereas is supply curve positively sloped? What are the implications behind the two questions together about demand and supply curve respectively?

Find the market clearing (equilibrium) price and quantity and show them graphically using S and D curves. A free hand graph will do as long as you identify clearly market clearing P and Q.

What would be the quantity demanded and the quantity supplied when P = $110?

What would happen to price in (c) and why? Incorporate short run rationing function of price in your answer.