Application of Linear

and Quadratic
Functions

EIB10503 - Business Mathematics

 Demand

refers to how much

(quantity) of a product or service is
desired by buyers.
Usually, the higher the price, the
smaller is the quantity demanded.
As the price falls, the quantity
demanded increases.

EIB10503 - Business Mathematics

 If

the price per unit of the product is

given by p and the corresponding
quantity (in units) is given by q,
Then an equation relating p and q is
called a demand equation.
Its graph is called a demand curve.

EIB10503 - Business Mathematics

(a, b)

EIB10503 - Business Mathematics

 Supply

represents how much the market can

offer.
If p denotes the price per unit and q denotes
the corresponding quantity, then an equation
relating p and q is called supply equation,
and the graph is called a supply curve.

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p
(c, d)

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Negative slope
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Positive slope
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Suppose the demand per week for

a product is 100 units when the
price is RM58 per unit and 200
units at RM51 per unit .
Determine the demand equation,
assuming that it is linear.

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EIB10503 - Business Mathematics

The slope of the line passing through

and is
p2 p1
m
q2 q1

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 An

equation of the line (point-slope form)

is

Simplifying

gives the demand equation

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 When

the demand and supply curves of a

product are represented on the same
coordinate plane, the point (m,n) where the
curves intersect is called the point of
equilibrium.
The price n called the equilibrium price.
The quantity is called the equilibrium
quantity.

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Supply curve

(m,n) equilibrium point

Demand curve
m

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To determine precisely the

equilibrium point, we solve the
system formed by the supply and
demand equations.

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By substituting

for p in the

demand equation, we get

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EIB10503 - Business Mathematics

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EIB10503 - Business Mathematics

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Equilibrium
price
9.50

(450,9.50) Equilibrium point

q
450
Equilibrium
quantity
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 Question

1
Demand: q= 286 20p
Supply: q= 88 + 40p
Find equilibrium point

EIB10503 - Business Mathematics

ans( 220,3.30)

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 Question

2
The supplier will produce 1000 units when
the selling price is $20 per unit and will
produce 1500 units if the price is $25 per
unit.
Determine the supply function.
Ans:

p = 1/100 q + 10

EIB10503 - Business Mathematics

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