Ok so I understand the basic concepts of supply and demand but the thing that is really tripping me up is the equations.
I have: Qs = 2p, Qd = 12 - p
I know that I should be plugging in values so this what I've done.
Qd = 12 - p
2p = 12 - Q
P = 12- Q divided by 2
P = 6 - 0.5Q
so when plotting on the graph for every 6 I go up I go 3 along...correct??
so for Qs = 2p:
Q = 2x6 (since P = 6)
Q = 12....Woohoo I think explaining it made me understand it more :O.
Ok so now my next problem is that I know that Q = 12. How do I find the equilibrium price by drawing?
Well I know it is where it hits the supply line but how do I draw the demand line?? can it hit the supply line anywhere? or should I be aiming to hit it at P meaning 6?
Help needed quickly watch
- Thread Starter
- 29-03-2013 00:01
- Thread Starter
- 29-03-2013 19:51
- 01-04-2013 14:09
What you need to note is that with the equation Qd = 12 - p, 12 is the quantity demanded at which price is 0. Knowing this, you have one point in your axis that you can plot. Your next step is to find the price at which Quantity Demanded is 0, to do this you substitute Qd with 0 to get the following: 0=12-p, hence p=12 when the quantity demanded is 0. After this, substitue a random price inbetween 0 and 12, such as 6 to get a third point. Qd=12-6, Qd= 6. Now you have 3 points on your graph that should form a straight line if you join them all up.
With Qs = 2p, it simply means the quantity supplied will always be twice the price. At p=0, Qs = 0. p=1, Qs = 2. p=3, Qs = 6. And so on.... Knowing this you can plot your supply curve.
If you've plotted them correct, these two curves should intersect where P=4