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Economics Lecture Two (view source)
Revision as of 11:39, September 5, 2009
, 11:39, September 5, 2009→Supply and Demand: solving simultaneous equations
[[Image:Supply_and_demand.gif]]
[[Image:Supply_and_demand.gif]]
The point where supply equals demand can be found either by graphing the two curves and seeing the point of intersection or, if you have the equation for each curve, but solving the equations algebraically. For example, if the supply curve is P = 100 + Q and the demand curve is P = 500 - Q, then the point of intersection can be found by solving these two equations: when the P in the first equation equals the P in the second equation, then 100 + Q = 500 - Q, 2Q = 400, and thus Q = 200. From there you can solve for P by plugging Q back into one of the two original equations (and you can check your answer by plugging Q into the other original equation and confirming that you get the same P).
=== Changes in Supply and Demand ===
=== Changes in Supply and Demand ===