Explore BrainMass

equilibrium production level

The law of Supply and Demand states that in a competitive market environment, supply tends to equal demand, and when this occurs, the market is said to be in equilibrium. Thus, market equilibrium occurs at the production level, xe, where S(xe) = D(xe). Note that S(x) is the supply function and D(x) is the demand function. For the supply and demand functions below find the value of xe where equilibrium occurs.

Show all work.

D(x) = -2x+275 and S(x) = 3x+150.


Solution Preview

In equilibrium, D(x) = S(x)

-2x + 275 =3x + 150
Move x terms to ...

Solution Summary

The solution shows how to find the equilibrium point when both supply and demand functions are given.