If the Quantity demanded qd = 90 – 0.05p and Quantity supplied qs = 0.8p – 12, find the excess demand when price is Rs. 100.
17
Excess demand at a given price is the amount by which quantity demanded exceeds quantity supplied: \(ED = q_d - q_s\). A positive value means buyers want more than sellers offer at that price.
Quantity demanded at p = 100: \(q_d = 90 - 0.05(100) = 90 - 5 = 85\) units.
Quantity supplied at p = 100: \(q_s = 0.8(100) - 12 = 80 - 12 = 68\) units.
Excess demand: \(ED = 85 - 68 = 17\) units. At Rs. 100 buyers want 17 units more than sellers offer, so the shortage would push the price up.
Hence, the answer is 17.
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