# Thread: supply - price equation

1. ## supply - price equation

Am I doing this correctly - thanks.

price: 2.27
supply: 7200

price: 2.36
supply: 7600

p = mx + b
-----------------
m = (2.36 - 2.27)/(7200-7600) = .09/-400 = -399.91
p = .09x - 399.91

2. No, if you take the first one, you need to take the first one.

What is mean is:

$m = \dfrac{2.36 - 2.27}{7600 - 7200}$

First is 2.36, hence, in the denominator, you get the value associated with 2.36, which is 7600 first.

Similarly, if you had put 2.27 first, then in the denominator, you will have 7200 - 7600.

3. Am I doing this correctly - thanks.

price: 2.27
supply: 7200

price: 2.36
supply: 7600

p = mx + b
-----------------
m = (2.36 - 2.27)/(7200-7600) = .09/-400 = -399.91
p = .09x - 399.91

the formula for a gradient is:
(change in p) / (change in x)

m = (2.36 - 2.27)/(7600 - 7200)

this evaluates to
.09/400 = 0.00023

So you know
p=0.000225x + b

Now you can sue a pair of points to find b. You know that on possible outcome is
price=2.27
supply=7200

so:
2.27=0.000225 * 7200 + b
2.27= 1.62 + b
0.65 = b

So
p = 0.00023x + 0.65

4. That makes sense - thanks.

5. So now I have:

P - 2.36 = .09x - .000225
P = .09x - 8.99

does this appear correct?

6. @SpringFan25 - sorry, I didn't see your post before posting my last response. I'm studying what you're doing now - thanks