00:01
Hello, let's use these two equations and let's determine algebraically the equilibrium price and quantity.
00:12
So we need to make them equal.
00:14
We make equal quantity demanded to quantity supplied.
00:20
So quantity demanded is 28 minus 3 times price and this should be equal to 2.
00:30
2 times price minus 12.
00:36
And from here we have 5 price equals to 40.
00:46
So the equilibrium price would be 8.
00:52
Equilibrium quantity.
00:54
Using any of this equation we can find that equilibrium quantity will be 4.
01:03
Now it was the part a.
01:10
In part b we need to plot demand and supply curves and confirm our answer.
01:18
So let me plot this graph.
01:24
We have simple graph.
01:30
We have price, we have quantity.
01:37
So when price is 6, supply curve intersects and the price and we have 9 .3 here and when the quantity is 28 the price for demand is 0.
02:01
So now we can put this two functions to this graph and we can plot these two curves.
02:15
So here we have demand here we have 28 and also we have supply curve which is somewhere here.
02:35
This is supply, this is demand and the equilibrium is somewhere here.
02:45
When price is 8, equilibrium quantity is 4.
02:50
So this point of intersection represents the equilibrium price and quantity...