How to Calculate Equilibrium Price and Quantity (Demand and Supply)
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- Опубликовано: 18 сен 2024
- Tutorial on how to solve for quantity demanded and quantity supplied using equations (algebra) used in economics class. Demonstration on how to determine equilibrium price and quantity (or market price and market quantity) and points on the demand and supply curves.
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Related Video: "How to calculate Inverse Supply and Inverse Demand • How to calculate Inver...
The way you animated was extremely useful in order to understand how you calculated the numbers, thanks!
+Gustav Hakegård Great to hear and good luck in your classes. Hopefully you will get a chance to share and like the videos. This will help others find them.
This is actually very helpful! Your voice is clear, your explanations precise, and the animation acts as an aid, not a hindrance or distraction. Thanks!
It would be helpful if you had a video on how the demand and supply equations were generated in the 1st place. Your videos are great , nice and clear . I gave you a " like " and subscribed.
Hello
@@blackhammer7415 Hello
Did you find anything
@@blackhammer7415 No , I have not been here in 7 years . Only came back because I got a notification that someone had posted a response to my 7 year old post....
@@sligon00 I haven't studied microeconomics, but my guess is that in real life these equations are based on empirical data, on the behaviour of the buyers and sellers.
The slopes on this example are exact opposites, 1 and -1, and the intercepts differ, because buyers would take product for free, but no one would make the product and give it away with prize of 0. Here the actual price is always above 4. It could be something else, but above 0, unless it is charity.
Are there examples, in which slopes are not exact opposites, in a way that their absolute values differ (like 1.5 and -2)? And can the equations be something else than linear, maybe exponential or quadratic (x^2)?
tf I still don't get it
😭😭😭me rn
@@-giselleomg same doing econ hw as we speak😭😭
My lecturer teaches only the theory and curves without explaining those equations. I was struggled to understand how it was came out. Thanks a lot ❤️
I struggled in my tutorial when Qs and Qd equations were brought in and how to calculate them. I'm pretty confident with what you have shown me on how to do them now, thanks! It makes sense now :)
Great video. I'm taking an econ test tomorrow and this video has really helped me feel more confident. Thanks!
Treat price (P) like y and (Q) like x. If you solve the equation for P, then it is the typical y = Mx format where M is the slope.
I have a question, why do you start the supply curve in specifically -4? i just wanna know what to input when using the QD and QS formulas.
I want to know too
Thank you - I found this very helpful as my limited time in lectures as part time grad student leaves one with a skeleton idea only. I tried this a few ways later and applied and got the correct figures. Given this subject does not come naturally, I really appreciate.
How do you find the equations just from having the graph without knowing the supply and demand equations?
Thanks that helped me out, haven't don't algebra in 35 years and that helped to get the rust off.
Holy piss this is frekin amazing. tons of economic videos. I learn as much from this six minute long video than I do in fifty five minutes with loud obnoxious teenagers screwing off in class! I hope I get an A on this test I have in a few days. If I can think of any video ideas that are worth your time, I will, because these were definitely worth mine!
You just helped me understand in 6min what I had trouble getting in my 2 and a half hour Microeconomics for Public Policy class
Thank you for your simple easy to understand straight forward explanations, you have really helped me with my school work.
awesome video!! thanks so much!! I thought I was going to bomb economics! now time will tell but at least i know equilibrium!!
thanks, I was going to have a rough time understanding this without the time you put into this video
Well thank you Whitney Rose... I appreciate the feedback. I am never sure if I am going to fast or too slow. Good luck in your classes too.
you are doing a great Job!.
Currently mba in university of texas and i justed needed to clarify things.
stumbled on your page and i bookmarked... thanks!
great video for students.thnaks you very much your great video.its very clear and can understand well.
Hit & Hot Thanks so much. I subscribed to your channel too.
Completely agree. Taking an Masters level Econ class online and the instructor isn't the most clear on steps and the book is the worst.
Anya Coleman I would be interested to know if there are additional videos I could add that would help you (areas where you struggled and wished I had a video).
Are you looking at total revenue? Because you need to calculate average revenue or revenue per unit.
603 divided by 38 or is this a per unit price already? Are you studying supply and demand or Production Theory (Marginal Cost, Average Cost, Marginal Revenue)?
9 year later and still saving lives :D Thank you!
Can I know how did 4 become minus 4
Thank you for the explanation! My teacher refuses to help us, but now I am prepared! :)
So how do you determine the “x” in Qd and Qs equation? Specifically to get the price and quantity equilibrium. I see you chose 16 and -4 but why did you choose those numbers? I get the equation but I don’t get what to put in the beginning
Same here
Usually the equation is already given
@andr3111 Yes that is correct. Keep in mind both consumer surplus and producer surplus will be reduced with a tax. Because there will be some deadweight loss.
This is an important concept and a great question. I can't believe I don't have a video on this topic yet! I will work up one this weekend and let you know when I post it
Good luck on your test. You can do it!
@corbs2011 Good question, but I think you are thinking about what happens when the supply curve crosses the x axis. When p = 0, the supply curve would cross the quantity axis (x) at -4. The y intercept is determined when Quantity = 0. When Quantity = 0, then price is 4.
Make sense?
Thank you man hopefully i m gonna pass my exam with your lessons thank you so much :)
SO MUCH BETTER THEN MY PROFESSOR
Yes, I need to do that, great suggestion. Externalities are really miss understood because they can be both positive and negative.
sure! i hope i can learn more about economics. thank you for your helped. I've got a high score in my exam....thanks again:))
sir u r great thank u the animated explaination is really help full to find from where the value for calculation is taken from price and quantity thank u sir
@kazooie14 Yes you could just draw an X as supply and demand and that would be fine. The way the most demand and supply curves are drawn in a text book look nothing like they would in the real world. One thing is for sure is both the supply curve and demand curves are not straight lines (or linear). Instead they are curved lines.
and its also step by step from basic steps that helps us thank u
Thank you so much, you saved my exam
@kumiko1115 holy schnikes that is good question dude! Keep in mind p is the price. When price is zero that is where the supply line (red) crosses the x axis. If you go back to 1:08 in the video you will see where the supply line crosses the x axis. It is probably confusing because the supply line crosses the y axis at +4. This is where quantity is equal to zero. Make sense?
Thanks for the question.
That actually does help. Thanks! The only thing that I am having trouble with now is that there are no numbers along my x or y axis so I'm not sure how I am suppose to figure this equation out... I guess that's what office hours are for haha
my professors don't teach us how to calculate the equilibrium price and quantity, yet he gives us these homework problems
This really helped! Thanks a million!
Thanks Chief, this really helped. You have yourself a new subscriber!!
“Last time I checked” after adding or subtracting numbers lol😂
Thank you I really understood your explanation. Very helpful.
Thank you so much, i have a microeconomics exam next monday and this is saving my ass!
how did you get to QS= -4 + 1p ? where did -4 come from? Are we given that?
How do you solve for the slope?
I found your video VERY helpful, your voice clear and just at the right speed and the graphics clear and helpful. Thank you.
Thank you! This will surely help me on my economics quiz.
EXCELENT!!!!!!!. tomy packet for my ECN test. thanks!!!
Its very helpful to me .Thank you soo much sir
THANK YOU BIG TIME, you simplified it so much
Thank you for posting the video, very much appreciated !
Your video explained the graph and the x's and y's and how you determined the equilibrium price for the numbers that you have. But what about when you have an actual product and you do not know those numbers? How would you get them? I would assume trial and error but that takes too long?
Glad I found you! I can pass my finals! LOL
+Julie Ann Gerochi Good luck on your finals, you can do it!!!!
Greetings. May I ask how did you get the Qs function?
It was given. But, the slope is 1, and where the "line" intersects the X Axis, is where the -4 is from seen at 1:16 , therefore Qs = -4 + 1p
In regards to the -4 in the equation Qs = -4 +1P. Notice at about 1:13 in the video when price is P= 0, then Qs = -4. The -4 is where the line crosses the x axis or the x intercept.
There is some confusion in economics because the equations are written different.
Check out the video "How to calculate Inverse Supply and Inverse Demand" on my economicsfun channel. I just added link to this video in the video description.
YOURE AMAZING. Thanks so much!!!!
Where did you get a slope of demand ( -1 and +1)?
Hello:) Did you find it? Where does it come from? Please help me out
you are the best! thanks a lot
Hmmm....that is a great question. supply would be straight up and down (vertical line) if it was totally inelastic. No matter what price is charged quantity supplied will remain fixed. The equilibrium price will be determined by demand.
Imagine the supply of fresh fish when the boats arrive on the dock -- supply is fixed. The price is determined by quantity demanded. If only a few people want the fish the equilibrium price will be low. If demand is high equilibrium price will be high.
Thank you very much I understood it perfectly.
Thank you so much! This helped me out!
Can you explain how you got the equation to determine quantity demanded, please?
if the Quantity demanded equation is -4 + 1p, wouldn’t the vertical intercept be -4? not positive 4? so that should change your equilibrium points?
This just saved my quiz score for tomorrow. I had no idea slope was the number in front of the P.
Chicaboomchicaboom Happy to be of service and that my vids saved you.
Hopefully you will like, share, subscribe, If you get a chance could you please like our FB page. www.FaceBook.Com/PartyMoreStudyLess It will help others find the videos.
Awesome job at explaining it. Thank so much! =)
+Aracely Amaya You are very welcome. Hopefully you can like and share the videos so other students can find them.
In regards to the -4 in the equation Qs = -4 +1P. Notice at about 1:13 in the video when price is P= 0, then Qs = -4. The -4 is where the line crosses the x axis or the x intercept.
check out the video "How to calculate Inverse Supply and Inverse Demand". I think it would help you to watch that video too. I would add a link but youtube does not allow it.
You are very welcome! Make sure you like MyBookSucks on FaceBook too (see video description for link). We post college humor stuff there.
Good luck in your classes too.
wow I wish they explained it like this in my class
That is odd. Make sure to check your units. Is 100 in pennies or in dollars as in should it be 1.00 instead of 100? I take it one of the equations is for the supply curve and the other is for the demand curve. When you set the two equations equal to each other and solve for p, p = 22.8.
Does it matter how you draw the demand and supply lines, in terms of spacing??? For example, could it have been drawn perfectly, like an X, in the middle? (Sorry if you answered this my iPhone is being stupid and won't load the video after 0.56)
When you just simply solve Qs & Qd equations, the price can be determine easily. Idk why need these much of steps!!
ie, in equilibrium Qs = Qd
So, 16 - 1P = -4 + 1P
So when we arrange it, it'll be like
16+ 4 = 1P + 1P
20 = 2P
P = 10
@andr3111 I just added a new video on my economicsfun channel, "Excise Tax Impact on Consumer Surplus" I would include a link, but RUclips does not allow it.
Do you have a video that explains price by demand where supply is constant?
EX: If price is .19 and there is a constant supply of 43 what will the price be if demand is 86? I'm trying to graph price if demand increases with a fixed supply.
You are very welcome. Make sure you like MyBookSucks on FaceBook (see link in video description). This will help me help other students too.
Good luck in your classes too.
very helpful - thank you!
Interesting how in economics the independente variable is on the y axes and the dependent variable in in the x axis. Algebraically, the independent variable, "unknown variable" is the price.
did we find the -4+1P equation from the graph, or is it a given information
Just a question: Doing a masters in Business but my algebra is non existent. I followed everything you explained except when you times everything by 1/2? Why did you times by 1/2?
Thanks very much for this.
I have a question, If a tax of $2 is imposed on the producer, how will this affect the equilibrium price? Do you just find out equilibrium price and quantity with the $2 tax??
i have an example in my lecture slides that is 286 - 2p = 88 + 40p. it says that p = 3.30. is this correct, because when i put 3.30 into the equation both sides are not equal
What would you do if you had to determine a new equilibrium price when there is a factor involved like a government subsisdy of?
Jean-Claude Spamer Jean good question. If the government subsidies a consumer demand will increase (shift to the right). It is similar to a consumer getting an increase in demand. When demand increases prices rise. I should create a video on impact of subsidies to consumers.
How would you calculate the equilibrium price and quantity given the demand curve for CDs is: Qd=20000- 2000P and CD’s can be produced at a cost of $5 each.
I am so confused, on my book QD is quantity - price, and your example is price-price? why it is 1p and the book example showing 4p, assume a number what we like? or assume a price of 1 dollar?
okay where the heck did you get your Qs and Qd? where did those come from? why is it -4+1p and 16-1p. Wish you would've further explained that
does the equilibrium have to be on the intersept
yes, same thing.
If you have a graphing calculator u can use intercept calculation to find the intercept after u plug in both formulas.
thank you:)
great job! thank you!
by the way, your explanation is great but the picture of the graph looks wrong.
When x= 0, y= -4. It appears you have y= 4 instead of negative when x= 0 in your video.
Very good info
what if Qd= 20-2p where Qd is the qantity demanded of a good and P is the price of the good. Cosider a supplu curve of Qs = 2p - 4 . how to grahp this and where is the intersect
Intercept is (6,8)
To graph you have to replace x and y with any number you want like 0,1,2 or 3 and so on.
Example: Qd= 20-2p; replace p with 1 to see what happens. P is same as x if you want to use a calculator to graph the answer. So if p = 1 then...
Qd=20-2(1)=18
So when p (or x) equals 1 that means Qd (or y) equals 18. So your ordered pair here is (1,18) . Same as (x, y).
After you have two points or ordered pairs per equation then you can graph them by hand and draw a straight line. You provided two equations so that is two lines that at point (6, 8) will intersect.
Great video. saol ay brat :D
+MURAD MURADLI Thanks. if you get a chance share and like the videos. Also like MyBookSucks FB www.FaceBook.Com/PartyMoreStudyLess. This will help others find the videos.
What do I do if the equations aren't given as quantity demand and supplied, they're given as Pd= 100-0.5q and Ps= 25+Q and I'm really not sure what to do
May I ask? Where did the 1 from 1p and -1p came from?
where did de +4 ( in both, quantity suplied and quantity demanded equation) come from ?
But why is supply -4 though?
Was wondering the same thing.....
+OhitsONnow Yeah why is supply -4 please tell us
+OhitsONnow I think its just a mess up, mistakes happen. It should just be the Y intercept which is positive 4.
thankyou so much
can you do both positive and negative please
thank you
Good question. You have to take the inverse demand and supply. I added a link to one of my videos "How to Calculate Inverse Supply and Demand." You can find the link in the video description above.
Hope this helps!
is it always Q= -1 or is that just for this example
Thanks man !
i have a problem. Qd=200-5p and Qs=-100+10p. and the point of equilibrium is ( 100(x), 20(y)) but when i try to graph it, it doesnt seem to work...? qd is (0,200),(200,0)
Why didnt you consider a negative slope of supply function? -4?
Any logic to ignore that?
does it matter if they are subtraction or addition