The goal is to find supply and demand equations using some given informations and then use the equations to find equilibrium point. After doing some market research, a manufacturer notices the following pattern for selling an item.
Supply
Price Supply
1 dollar 600 units
4 dollars 4200 units
6 dollars 6600 units
9 dollars 10200 units
Demand
Price Demand
1 dollar 3600 units
4 dollars 900 units
6 dollars 600 units
9 dollars 400 units
Notice that for the supply, as the price goes up, the number of items goes up too.
This is so because it will cost the manufacturer more money to produce more items.
However, for the demand, as the price goes up, the number of items goes down.
People have a tendency to buy less when the price goes up.
s = 1200p + -600
The equilibrium point is the price at which the supply is equal to the demand
May 21, 17 09:19 PM
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May 21, 17 09:19 PM
Sharpen your math skills by grade here with crystal clear lessons