Supply and demand function?

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• Apr 16th 2008, 09:23 AM
romanianxromo
Supply and demand function?
Let S and D be the supply and demand functions, respectively, for a particular item; also let these be functions of price as follows: S(p)= -1000 + 2500p, D(p)=9000 - 2000p. The equilibrium price is that price at which supply and demand (S=D).

(a). Find the equilibrium price p.
(b). Find the equilibrium price quantity, S or D.
(c). Determine the prices for which quantity demanded is less than quantity supplied.

Here's what I got:

-1000 + 2500p = 9000 - 2000p
4500p=10000
p= 2.22222 (repeating)

So I put in 2.2 for S and got 4500 and then 2.2 for D and got 4600. Shouldn't they be the same?

I'm confused as to what to do next
• Apr 16th 2008, 09:57 AM
janvdl
Quote:

Originally Posted by romanianxromo
Let S and D be the supply and demand functions, respectively, for a particular item; also let these be functions of price as follows: S(p)= -1000 + 2500p, D(p)=9000 - 2000p. The equilibrium price is that price at which supply and demand (S=D).

(a). Find the equilibrium price p.
(b). Find the equilibrium price quantity, S or D.
(c). Determine the prices for which quantity demanded is less than quantity supplied.

Here's what I got:

-1000 + 2500p = 9000 - 2000p
4500p=10000
p= 2.22222 (repeating)

So I put in 2.2 for S and got 4500 and then 2.2 for D and got 4600. Shouldn't they be the same?

I'm confused as to what to do next

Set $p = \frac{20}{9} = 2,22222.....$

$S = D = 4555,55555....$
• Apr 16th 2008, 10:27 AM
romanianxromo
Quote:

Originally Posted by janvdl
Set $p = \frac{20}{9} = 2,22222.....$

$S = D = 4555,55555....$

Where did you get the 20 from?

Then how would I find the prices for which quantity demanded is less than the quantity supplied?
• Apr 16th 2008, 11:12 AM
janvdl
Quote:

Originally Posted by romanianxromo
Where did you get the 20 from?

Then how would I find the prices for which quantity demanded is less than the quantity supplied?

$2,2222.... = \frac{20}{9}$

The reason yours is wrong is because you rounded.

Do NOT round until your final answer for the question.
• Apr 16th 2008, 11:30 AM
romanianxromo
So then the price for the quantity demanded is less than the quantity supplied

is that 455,555....?

Or is it something else?
• Apr 16th 2008, 11:42 AM
janvdl
Quote:

Originally Posted by romanianxromo
So then the price for the quantity demanded is less than the quantity supplied

is that 455,555....?

Or is it something else?

Price is equal for quantity demanded and supplied since the market has reached equilibrium.

4 555,55.... will be the quantities.
• Apr 17th 2008, 03:46 PM
cokhale
ur question is not correct
qd = 9000-2000p
qs = -1000 + 2000p

qd =qs

-1000 + 2500p = 9000-2000p
collect like terms

10000 = 500p
p= 10000/500 = 100/5 = 20
equilibrium price is N20.

qs = -1000 + 2500(20)
= -1000 + 50000
= 49000
qd = 9000-2000(20)

= 9000 - 40000
= - 31000
• Apr 17th 2008, 04:33 PM
romanianxromo
Quote:

Originally Posted by cokhale
qd = 9000-2000p
qs = -1000 + 2000p

qd =qs

-1000 + 2500p = 9000-2000p
collect like terms

10000 = 500p
p= 10000/500 = 100/5 = 20
equilibrium price is N20.

qs = -1000 + 2500(20)
= -1000 + 50000
= 49000
qd = 9000-2000(20)

= 9000 - 40000
= - 31000

Where are you getting the 500p from? When you add 2000p, you get 4500, not 500
• Apr 18th 2008, 09:02 AM
janvdl
Quote:

Originally Posted by cokhale
qd = 9000-2000p
qs = -1000 + 2000p

qd =qs

-1000 + 2500p = 9000-2000p
collect like terms

10000 = 500p
p= 10000/500 = 100/5 = 20
equilibrium price is N20.

qs = -1000 + 2500(20)
= -1000 + 50000
= 49000
qd = 9000-2000(20)

= 9000 - 40000
= - 31000

You are really working on my nerves.

Do not try to tell me stuff like: "try to read simple interest" or "ur question is not correct".

You have no idea what you're doing anyway.

If you want to correct me, please make sure you revise your basic arithmetic next time.

Thank you.

- Janvdl.
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