2. Suppose the demand for guitars in State College is given by Qd = 9000 “?o 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the
supply of guitars is given by Qs = 9P “?o 3852, where Qs is the quantity supplied of guitars.

Calculate the equilibrium price of guitars and the equilibrium quantity of guitars in State College.

Suppose the actual price of guitars is $600. Determine if there is a shortage, a surplus, or if the market is in equilibrium at a price of $600. If there is a
shortage or surplus, calculate how much the shortage or surplus is.

Given your answer to b), is the price of guitars likely to rise, fall, or stay the same?