Use the following information to answer the next question. Market for flat-screen TVs: Demand: Qd = 2,600 – 5P Supply: Qs = –1,000 + 10P What would be the quantity demanded if a price floor is set at $400?

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BlackTom AI · Accepted Answer

The question provides the demand function Qd = 2,600 – 5P and asks for the quantity demanded when the price floor is set at $400.
First, substitute P = 400 into the demand function: Qd = 2,600 – 5(400).
Compute 5 × 400 = 2,000, so Qd = 2,600 – 2,000 = 600.
Thus, the quantity demanded at a price of $400 is 600 units.
Note: The concept of a price floor matters for the market balance because it may create a surplus if the floor is above the equilibrium price. However, the question specifically asks for the quantity demanded at that price, which is determined by the demand function alone, yielding 600 units. For completeness, if you checked supply at P = 400, Qs = –1,000 + 10(400) = –1,000 + 4,000 = 3,000, illustrating a potential surplus since supply exceeds demand at that price.
Given the computed result, the option that matches this quantity is 600.

Use the following information to answer the next question. Market for flat-screen TVs: Demand: Qd = 2,600 – 5P Supply: Qs = –1,000 + 10P What would be the quantity demanded if a price floor is set at $400?

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