Market Demand and Market Equilibrium Price
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Compute the market demand and determine the market equilibrium price and market equilibrium demand.
1. Use the following demand data to compute the market demand when the price is $45.
P D1 D2 D3
37 20 4 8
47 15 2 7
57 9 1 6
67 5 1 4
2. Use the following supply data along with the demand data from exercise 1 to determine the market equilibrium price and market equilibrium demand.
P S1 S2 S3
37 1 4 13
47 2 8 14
57 9 13 18
67 9 17 20
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Solution Summary
A tutorial is provided on how to compute market equilibrium price and demand.
Solution Preview
1. Calculate the demand equation for each product using the linear equation:
y = mx + c
y = demand
x = price
c = fixed demand regardless of price
20 = 37m + c c = 20 - 37m 20 -37m = 15 - 47m
15 = 47m + c c = 15 - 47m
Then determine the value of the m by dividing the change in ...
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