Alright. Let's go ahead and try this one here. So it gives us a couple of curves here. We've got a supply curve and a demand curve and it's asking us to find equilibrium price and quantity. The first thing you should notice is that different variables are isolated in each equation, right. In our demand equation, the first equation, price is isolated, and in the second equation, the supply equation, quantity is isolated. And how do I know which is which? It's because the first one has quantity demanded in it, the second one has quantity supplied in it, okay? So the first thing we want to do is isolate the same variable. So I don't like the looks of the first equation, I kind of think that the fraction is just messing with me. I'm gonna rearrange that so that I have quantity demanded by itself, but remember, you could also rearrange the other one and we'll get to the same answer. This is the way I'm going to do it. So we've got p = 6 - 150QD. Right? And I want to get that QD by itself. So the first thing we need to do is move that 6 from one side to the other, and we're going to get p - 6 = - 150QD. So how do we get rid of that pesky fraction? We need to multiply by the reciprocal, right? So I'm gonna multiply by 50 over 1, right? So just negative 50, so multiply by negative 50 and negative to get rid of the negative sign in the front there. So I want to do negative times a negative to get rid of the negative and then the 50 times the 1 fiftieth to cancel out that fraction. So if I'm going to multiply this side by negative 50, I need to multiply the other side by negative 50 as well. Let's go ahead and isolate this variable. So this negative and this negative cancel, the 50 and the 1 fiftieth cancel, and we're left with just quantity demanded on this side of the equation and let's expand this out. We've got -50p and -50 × ( - 6 ). Those negatives are going to cancel out. We're going to get a positive, 6 times 50 is 300. Alright. So -50p and then 300. So there we go. That is going to be the same equation with quantity demanded isolated. Right. So now we can go on to the next step where we set the 2 equations equal to each other based on that isolated variable. Alright. So I'm going to take this side of this equation right here and this side of this equation right here, our supply and our demand equation, and let's go ahead and set them equal. So -50p + 300 = 150p - 100. Alright so now I want to isolate my Ps so I'm gonna get them all on one side. Plus 50p plus 50p, and I will have 200p over here minus 100, and on this side the Ps canceled and I'll have 300. 300 = 200p - 100. Let's go ahead and add 100 to each side. So 400 equals 200p, that cancels. We'll divide both sides by 200 and we'll get an answer of p = 2. Alright, so we've figured out what p is. Now it's just a matter of plugging this into either of our original equations and we will get our quantity. So this will be our equilibrium price and based on this alone, we'll know which answer to the question it is, right? It's going to be B. See only one with an equilibrium price of 2. So on a test, you're crunched for time. Hey, this is enough information to get this right, but let's go ahead and finish it up. So with the price of 2, I'm going to go ahead and use the supply equation. It looks easier to just plug a number in, so quantity supplied or just quantity, right, at equilibrium, they're going to be the same for demand and supply. Quantity equals 150 times our price of 2 minus 100. Right, so I just took this equation up here, QS = 150p - 100, plugged in 2 for p, and let's find out what Q equals. 300, 150 × 2 = 300, - 100, Q = 200. Just like we see in that answer, so the answer is going to be B. Alright, let's move on.
Table of contents
- 0. Basic Principles of Economics1h 5m
- Introduction to Economics3m
- People Are Rational2m
- People Respond to Incentives1m
- Scarcity and Choice2m
- Marginal Analysis9m
- Allocative Efficiency, Productive Efficiency, and Equality7m
- Positive and Normative Analysis7m
- Microeconomics vs. Macroeconomics2m
- Factors of Production5m
- Circular Flow Diagram5m
- Graphing Review10m
- Percentage and Decimal Review4m
- Fractions Review2m
- 1. Reading and Understanding Graphs59m
- 2. Introductory Economic Models1h 10m
- 3. The Market Forces of Supply and Demand2h 26m
- Competitive Markets10m
- The Demand Curve13m
- Shifts in the Demand Curve24m
- Movement Along a Demand Curve5m
- The Supply Curve9m
- Shifts in the Supply Curve22m
- Movement Along a Supply Curve3m
- Market Equilibrium8m
- Using the Supply and Demand Curves to Find Equilibrium3m
- Effects of Surplus3m
- Effects of Shortage2m
- Supply and Demand: Quantitative Analysis40m
- 4. Elasticity2h 16m
- Percentage Change and Price Elasticity of Demand10m
- Elasticity and the Midpoint Method20m
- Price Elasticity of Demand on a Graph11m
- Determinants of Price Elasticity of Demand6m
- Total Revenue Test13m
- Total Revenue Along a Linear Demand Curve14m
- Income Elasticity of Demand23m
- Cross-Price Elasticity of Demand11m
- Price Elasticity of Supply12m
- Price Elasticity of Supply on a Graph3m
- Elasticity Summary9m
- 5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
- Consumer Surplus and Willingness to Pay38m
- Producer Surplus and Willingness to Sell26m
- Economic Surplus and Efficiency18m
- Quantitative Analysis of Consumer and Producer Surplus at Equilibrium28m
- Price Ceilings, Price Floors, and Black Markets38m
- Quantitative Analysis of Price Ceilings and Price Floors: Finding Points20m
- Quantitative Analysis of Price Ceilings and Price Floors: Finding Areas54m
- 6. Introduction to Taxes and Subsidies1h 46m
- 7. Externalities1h 12m
- 8. The Types of Goods1h 13m
- 9. International Trade1h 16m
- 10. The Costs of Production2h 35m
- 11. Perfect Competition2h 23m
- Introduction to the Four Market Models2m
- Characteristics of Perfect Competition6m
- Revenue in Perfect Competition14m
- Perfect Competition Profit on the Graph20m
- Short Run Shutdown Decision33m
- Long Run Entry and Exit Decision18m
- Individual Supply Curve in the Short Run and Long Run6m
- Market Supply Curve in the Short Run and Long Run9m
- Long Run Equilibrium12m
- Perfect Competition and Efficiency15m
- Four Market Model Summary: Perfect Competition5m
- 12. Monopoly2h 13m
- Characteristics of Monopoly21m
- Monopoly Revenue12m
- Monopoly Profit on the Graph16m
- Monopoly Efficiency and Deadweight Loss20m
- Price Discrimination22m
- Antitrust Laws and Government Regulation of Monopolies11m
- Mergers and the Herfindahl-Hirschman Index (HHI)17m
- Four Firm Concentration Ratio6m
- Four Market Model Summary: Monopoly4m
- 13. Monopolistic Competition1h 9m
- 14. Oligopoly1h 26m
- 15. Markets for the Factors of Production1h 33m
- The Production Function and Marginal Revenue Product16m
- Demand for Labor in Perfect Competition7m
- Shifts in Labor Demand13m
- Supply of Labor in Perfect Competition7m
- Shifts in Labor Supply5m
- Differences in Wages6m
- Discrimination6m
- Other Factors of Production: Land and Capital5m
- Unions6m
- Monopsony11m
- Bilateral Monopoly5m
- 16. Income Inequality and Poverty35m
- 17. Asymmetric Information, Voting, and Public Choice39m
- 18. Consumer Choice and Behavioral Economics1h 16m
3. The Market Forces of Supply and Demand
Supply and Demand: Quantitative Analysis
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