Consider the Following Demand and Supply Curves: Q^d = 100

Multiple Choice

Consider the following demand and supply curves: Q^d = 100 - 2P, and Q^s = ½ P, calculate the equilibrium P and Q for this initial situation and assuming the demand curve changes to Q^d = 100 - P. Which of the following is correct?

A) the initial equilibrium is P = 40, Q = 20 and the demand curve shifts left.
B) the initial equilibrium is P = 40, Q = 20 and the new equilibrium is P = 36, Q = 28.
C) the initial equilibrium is P = 40, Q = 20 and the new equilibrium is P = 66 2/3 and Q = 33 1/3.
D) the initial equilibrium is P = 40, Q = 20 and the demand curve shifts right.