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Economics/maths question

Hello,

Anyone know the answer to the following,

For the market clearing equation q = a - bp, and q = c + dp, equilibrium price is given by what equation?

regards
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Avatar for john !!
john !!
14
I've managed to understand what you're asking I think.. you want to know what is the value of p where the two values of p and q are equal, in terms of a, b, c and d?

well put q equal:

a - bp = c + dp
dp + bp = a - c
p = (a-c)/(d+b)

the conditions for this are that -b is not equal to d,
otherwise the lines have the same gradient and will either not tough, or touch at every value of p. (but this is probably unlikely as I think one is a demand curve and one a supply, maybe you would have the exceptional demand curve though where the elasticity is negative)>

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