Linear Demand and Supply

Click here to download the Unit 1 Discussion Board Worksheet.

In your own words, please post a response to the Discussion Board and comment on other postings. You will be graded on the quality of your postings.

Part II Responseto classmates:

Annie Hall        

Re:Unit1 – Discussion Board

Hello Everyone! I hope everyone enjoyed their break, it was a much needed one for me. Im looking forward to talking with each of you over this course. Good luck!

For This DB I chose the points (3,1200) and (16,100)

Finding the Slope:

M = Q2-Q1/P2-P1      M = 100-1200/16-3    M = (-1100/13) or -366.67

Finding B:

Q2 = MP2 + B     100 = (-366.67)16 + B    100 = (-5866.67) + B  B= 5966.67

Q= (-366.67)P + 5966.67

What is the Demand when your price is $10?

Q = (-366.67)(10) + 5966.67     Q = (-3666.7) + 5966.67    Q = 2299.97

Whats the price when Q < 20 Items?

20 > (-366.67)P + 5966.67   (-5946.67) > (-366.67)P      P< 16.22

Supply Fuction: Q = 100P + 80  When Price is $10

Q=100(10)+80     Q=1000+80   Q=1080

The Supply 1080 is less when the demand was 2299.97. meaning demand was to high and supply couldnt keep up.

How to find an equalibrium price?

When you have two linear equations that will intercept one another, you need to set both equations equal to one another.  As an example x=y and y=x

100P+80=(-366.67)P+5966.67         100P=(-366.67)P+5886.67     466.67P=5886.67  P=12.61

See attachment for graph

Knowning the equalibrium price is important because this is the starting point of where producers can see if they can afford to increase or decrease price without losing to much money.

The unit 1 intellipath was a success for me, and after completing the determinded knowledge i didnt have any new nodes to learn. The practice given though was very helpful in reminding me how to solve certain equations and to set up certain equations.