Question

How to calculate world suppy and demand function?

Answer 1

Suppose that demand is given by the equation QD=500 – 50P, where QD is quantity demanded, and P is the price of the good. Supply is described by the equation QS= 50 + 25P where QS is quantity supplied. What is the equilibrium price and quantity?So here we get:Qd=Qs=500-50P=50+25Por (subtract 50 from both sides, and add 50P to both sides to get)450=75Pdivide both sides by 75 to get P = 6.Plug P = 6 into both quantity functions:500-50(6) = 200and50+25(6) = 200So we know that equilibrium price is 6, and equilibriumquantity is 200.