HOMEWORK: BALANCING POINTS

RESOLVE:
1.- The supply and demand curves of the market for a certain good are defined by the following
equations:

O = 250 + 25P D = 2.750 - 75P

a) Represent them graphically and calculate the quantity and equilibrium price.

Resolution:
We calculate the Equilibrium price Replacing we obtain the Q supply and Q demand.

250 + 25p = 2750 - 75p Q supply Q demand

25p+75p = 2750 - 250 250 + (25* 25) = 2750 – (75*25)

100p = 2500 250 + 625 = 2750 – 1875

p = 2500/100 875 = 875

p = 25

b) Determine the excess supply or excess demand for a price of 9

Q supply Q demand
250 + (25* 9) = 2750 – (75*9)
250 + 225 = 2750 – 675
475 = 2075
Excess demand $1.600.-

$ 30

Equilibrio
$ 25

$ 20 Supply Curve Demand Curve

Precio

$ 15

$ 10

$5 Excess Demand 1600

$0
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Cantidades
2.- The market supply and demand functions of a product are the following

O = 500 +50P D = 5.500 - 150P

a) Calculate the equilibrium quantity and price

b) Graphically represent the supply and demand curves

Graphically verify the result obtained.

Resolution:
We calculate the Equilibrium price Replacing we obtain the Q supply and Q demand.

500 + 50p = 5500 - 150p Q supply Q demand

50p+150p = 5500 - 500 500 + (50* 25) = 5500 – (150*25)

200p = 5000 250 + 1250 = 5500 – 3750

p = 5000/200 1750 = 1750

p = 25

c) For a P=18, determine whether there is excess supply or excess demand and in what
quantity.

Q supply Q demand
250 + (25* 18) = 2750 – (75*18)
250 + 900 = 2750 – 2700
1400 = 2800
Excess demand $1,400.-

$ 30
Balance
$ 25
Supply Demand Curve
$ 20
Curve
Precio

$ 15
Excess Demand
$ 10
1400
$5

$0
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Demanda