 ## Microeconomics

Learn the toughest concepts covered in Microeconomics with step-by-step video tutorials and practice problems by world-class tutors

The Market Forces of Supply and Demand

# Supply and Demand: Quantitative Analysis

Everyone's favorite:algebra!
1
concept

## Equation of a Demand Curve 4m
Play a video:
2
concept

## Isolating Variables in the Demand Equation 3m
Play a video:
Alright, so you'll notice in our equation price is isolated by itself on the left hand side of the equation right? But sometimes we might want to rearrange the equation just so quantity is instead the isolated variable? Right? So sometimes it could be the case that we want quantity to be just by itself on one side of the equation. So how do we do that? We're gonna use just a little bit of our here to rearrange the equation. So let's go ahead and do that. I'm gonna rewrite it. P equals 800 minus two Q. D. So we want to get the quantity by itself. So the first thing we want to do is move the 800 to the other side, right minus 800 minus 800 on this side. And we are gonna have p minus 800 equals and this cancels out right here and we're left with negative two Q. D. On the right hand side of the equation. Right? So the next thing is to get the Q. D. All the way by itself, right? So what we need to do to get rid of that coefficient, the negative two in front of the queue D. Is right now it's being multiplied negative two times Q. D. So we need to divide to get it out of there. So we're gonna divide by negative two. And that's gonna get rid of that coefficient there for the quantity. And but if we do that side by negative two, we also have to do the other side by negative two as well. So this will cancel out these negative two's and we're gonna be left with just quantity demanded on the right hand side of the equation. But how do we do this? P minus 800 over negative two. Well you might not remember exactly how to do that. So one thing I suggest is just take the denominator the negative two and just put it under each of them. So what we're gonna have is P divided by negative two minus 800 divided by negative two. And that's exactly what is happening here. Right P over negative two minus 800 over negative two. So let's go ahead and finish this up. 800 divided by negative two is gonna give us negative 400. Right? And P over negative two. Well that's the same thing as saying negative half P. Right. P over two is the same as half of a P. So negative half P minus a negative 400. Right? So one more thing that you guys remember from algebra is when we have two negatives negative and a negative makes a positive and we're gonna end up with this formula right here, negative half P plus 400 equals quantity demanded. Right? That is how we got the quantity demanded by itself. We can also rewrite this. I'm gonna do an arrow. It's also acceptable to have this as our final answer. Um 400 minus half P equals Q. D. Right. I just rearrange the terms so that the negative term wasn't first. I think it's just easier to read like that. 400 minus half P. And of course just in case you didn't remember, we could also do this. These are all interchangeable. Um Q. D equals 400 minus half P. Right? So I just took the right hand side and I flipped it. I just put the Q. T. On the left and the little equation stuff on the right. So that is how we switch which variable isolated with just a little bit of algebra. There's more than one way to do this. So if you have another way you're more comfortable with to switch the variables around, go ahead and do it your way. This is just the way I would have done it. All right. We're going to do the same thing now with supply and we'll have another example of of isolating variables there as well. Alright, let's move on to supply.
3
concept

## Equation of a Supply Curve 2m
Play a video:
So just like we did with demand, let's go ahead and put a supply curve on the graph. So here we have a equation given to us. P equals 200 plus Q. S Okay. So piece by itself on the left hand side of the equation. So we'll pick quant we'll pick numbers for quantity and then it'll be easy to just find out what the price would be at that quantity. Alright, so let's go ahead and pick let's start with an easy number zero. Right? So at a quantity of zero let's solve for price P equals 200 plus zero. Hopefully you guys can do this math right here, P equals 200. Right? So the quantity of zero, we're gonna have a price of 200. Let's go ahead and put that in there. We've got our price axis quantity access. It's gonna be right here. Alright, let's go ahead and pick other numbers. Um I believe in the other video we did 203 100. Um Let's go ahead and just pick we'll do 200 as well here I guess. Why not? So P equals 200 plus and quantity supplied is going to be 200. So P equals 400 right there. Alright, so we'll say at a quantity of 200 price will be 400 and will be something like that. So let's go ahead and pick one more. Right. Right now we could go ahead and make our whole line because we have the two points. But just for fun let's do one more point and we did 300 before. So let's do it here. P. Equals 200 plus quantity supplied of 300 we're gonna get a P equal to 500 here. So at 300 we have a price of 500 right here and it looks like it's gonna be along the same line. Here's my attempt at the line attempt. Number one. Oh it started so good. Alright let's go again. Oh my God people alright that we're just gonna have to settle for that. It almost goes through that last point but there we go, that is gonna be our supply curve right there. Okay so we've taken those points, we just plug them into the equation and then we put it onto the graph. Let's do one more about isolating variables.
4
concept

## Isolating Variables in the Supply Equation 53s
Play a video:
So just like we did with demand, we can also isolate different variables with the supply curve, right? There could be a situation that we want to get the quantity supplied by itself on one side of the of the equation. So we're gonna have to rearrange, and luckily this equation is pretty simple. So we're gonna have 200 plus Q. S. So we want to get Qs by itself, We need to subtract this 200 out of here and we'll subtract 200. Let me do it in Blue, subtract 200 from here. Subtract 200 from here, and we will get P minus 200 equals Q. S. So this equation was simpler than the other one. Um We were able to isolate Q just by moving the 200 from one side to the other. Alright, so now let's see how these work together.
5
concept

## Finding Equilibrium Using Algebra 10m
Play a video:
6
example

## Finding Equilibrium Using Algebra 5m
Play a video:
7
Problem

The supply and demand curves for a product are as follows:

Qd = 10560 − 80P
P = 1 40Qs + 6

What is the equilibrium price and quantity of the product?

8
concept

## Finding Equilibrium with Equations and a Graph 7m
Play a video: 