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Supply and Demand: Quantitative Analysis quiz

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  • How do you plot a demand curve using its equation?
    Pick values for quantity, solve for the corresponding price using the demand equation, and plot those points on a graph.
  • What is the price when the quantity demanded is zero in the equation p = 800 - 2q?
    The price is 800 when the quantity demanded is zero.
  • How do you isolate quantity demanded in the equation p = 800 - 2qd?
    Subtract 800 from both sides, then divide both sides by -2 to get qd by itself.
  • What is the rearranged form of p = 800 - 2qd to isolate qd?
    qd = 400 - 0.5p.
  • How do you plot a supply curve using its equation?
    Pick values for quantity supplied, solve for the corresponding price, and plot those points on a graph.
  • What is the price when the quantity supplied is zero in the equation p = 200 + qs?
    The price is 200 when the quantity supplied is zero.
  • How do you isolate quantity supplied in the equation p = 200 + qs?
    Subtract 200 from both sides to get qs = p - 200.
  • What is the first step in finding equilibrium using supply and demand equations?
    Make sure the same variable (either price or quantity) is isolated in both equations.
  • How do you find the equilibrium quantity algebraically when both equations have price isolated?
    Set the two equations equal to each other and solve for quantity.
  • What is the equilibrium quantity and price for the equations p = 800 - 2q and p = 200 + q?
    The equilibrium quantity is 200 and the equilibrium price is 400.
  • How do you verify equilibrium by isolating quantity in both supply and demand equations?
    Set the rearranged equations equal to each other, solve for price, and then substitute back to find quantity.
  • What does the intersection point of the supply and demand curves on a graph represent?
    It represents the market equilibrium, where quantity supplied equals quantity demanded.
  • What happens if you get a negative quantity supplied when plugging in a price into the supply equation?
    A negative quantity supplied is not meaningful in this context and cannot be plotted on the graph.
  • How can you use a graph to find the equilibrium price and quantity?
    Plot both the supply and demand curves and identify the point where they intersect.
  • Why is it important to use the same variable (price or quantity) when setting supply and demand equations equal?
    Because equilibrium requires that both the price and quantity are the same for supply and demand, so the equations must be set equal using the same variable.