Supply and demand functions

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May 15th 2011, 05:33 AM
komodo

Supply and demand functions

Hi guys I would appreciate any help on how to tackle this problem.

Q. Consider the market supply and demand functions given by:

qD = -1pD + 2000
qS = 12pS - 200

a.) Find the market equilibrium point
b.) Transpose/invert the equations to find the inverse supply and demand functions

Many Thanks in advance :)
May 15th 2011, 06:56 AM
Sudharaka

Quote:

Originally Posted by komodo

Hi guys I would appreciate any help on how to tackle this problem.

Q. Consider the market supply and demand functions given by:

qD = -1pD + 2000
qS = 12pS - 200

a.) Find the market equilibrium point
b.) Transpose/invert the equations to find the inverse supply and demand functions

Many Thanks in advance :)

Dear komodo,

For the first part you have to know that at the market equilibrium, $q_d=q_s$ .

Therefore, $-p+2000=12p-200$

$13p=2200$

$p=169.2308$

To find the inverse supply and demand functions subject p (unit price) in the given equations.
May 15th 2011, 07:18 AM
komodo

Quote:

Originally Posted by Sudharaka

Dear komodo,

For the first part you have to know that at the market equilibrium, $q_d=q_s$ .

Therefore, $-p+2000=12p-200$

$13p=2200$

$p=169.2308$

To find the inverse supply and demand functions subject p (unit price) in the given equations.

Thanks for your quick response :) I made a typo mistake the first equations should have been qD= -8pD + 2000 not -1pD anyhow would I be correct in assuming that the equlibrium point is 110P based the corrections?

Thank :)
May 15th 2011, 07:22 AM
Sudharaka

Quote:

Originally Posted by komodo

Thanks for your quick response :) I made a typo mistake the first equations should have been qD= -8pD + 2000 not -1pD anyhow would I be correct in assuming that the equlibrium point is 110P based the corrections?

Thank :)

Then the equilibrium price would be 110 (not 110P).
May 15th 2011, 07:24 AM
komodo

Quote:

Originally Posted by Sudharaka

Then the equilibrium price would be 110 (not 110P).

Yeap sorry I meant 110=p :)