Calculation of equilibrium price and equilibrium quantity .
Calculation of equilibrium price and equilibrium quantity using Functions Market Equilibrium refers to the point where quantity demanded equals quantity supplied For example ,Given: Demand function as : 40 - 6P Supply function as : 12P -32 (1) Calculate the equilibrium price Solution Note : At equilibrium, Quantity demanded = Quantity supplied Thus, 40 - 6P = 12P - 32 Collect like terms : 40 + 32 = 12P + 6P 72 = 18P Divide both sides by 18 72/18 = 18P/18 P = 4. Therefore ,equilibrium price (P) is $4 (2)Determine the equilibrium quanti...