Post on 31-Mar-2015
example 3 Market Equilibrium
Chapter 2.3
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
200 2p q
60 5p q
a. If the price is $140, how many units are supplied and how many are demanded?
b. Does this price give a surplus or a shortfall of the product?
c. What price gives market equilibrium?
2009 PBLPathways
2009 PBLPathways
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
200 2p q
60 5p q
a. If the price is $140, how many units are supplied and how many are demanded?
b. Does this price give a surplus or a shortfall of the product?
c. What price gives market equilibrium?
2009 PBLPathways
200 2p q
60 5p q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
340 2
170
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
340 2
170
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
140 200 2
60 2
30
q
q
q
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
140 200 2
60 2
30
q
q
q
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 60 5
80 5
16
q
q
q
140 200 2
60 2
30
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
a. If the price is $140, how many units are supplied and how many are demanded?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
b. Does this price give a surplus or a shortfall of the product?
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60 2
30
q
q
q
140 60 5
80 5
16
q
q
q
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2p q
60 5p q
Demand function:
Supply function:
price per unit
quantity of units
140 200 2
60
0
2
3
q
q
q
140 60 5
80 5
16
q
q
q
b. Does this price give a surplus or a shortfall of the product?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5p q
200 2p q
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5 200 2q q
60 7 200
7 140
20
q
q
q
(20,160)
Demand
Supply
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5 200 2q q
60 7 200
7 140
20
q
q
q
(20,160)
Demand
Supply
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5 200 2q q
60 7 200
7 140
20
q
q
q
(20,160)
Demand
Supply
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5 200 2q q
60 7 200
7 140
20
q
q
q
(20,160)
Demand
Supply
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways
200 2p q
60 5p q
200 2
60 5
p q
p q
60 5 200 2q q
60 7 200
7 140
20
q
q
q
(20,160)
Demand
Supply
c. What price gives market equilibrium?
Suppose the daily demand for a product is given by , where q is the number of units demanded and p is the price per unit in dollars, and that the daily supply is givenby , where q is the number of units supplied and p is the price per unit in dollars.
2009 PBLPathways