00:01
In order to figure out the equilibrium quantity and price for this gum market, and also to that in graph it, we're going to need to use the table, right, to figure out where quantity demanded and quantity supplied are equal to each other.
00:15
So over here to the right, i've just copied down the two most important price points that will help us figure out the equilibrium price.
00:23
Right, so if we notice in the chart in general for every increase of price in 20, we're going to lose for, units demanded and increased supply by 40.
00:33
So there's a linear relationship between quantity and price.
00:37
So as we can see here, when we go from a price of 40 to 60, this is where we switch from quantity supplied being less than demand to it being more than demand.
00:46
So this is where we're going to find our equilibrium quantity.
00:48
This is where we're going to find that they intersect.
00:52
So if we remember that for every increase in price of 20, we increase our supply by 40.
00:58
If we say have the price rate, so we increase it by 10 to get to 50, then we should increase our supply by half of what we normally do by 20 to get to 120.
01:09
And then same with demand.
01:11
If we increase price by 10, we decrease it by 20.
01:14
So we'll get to 120.
01:15
So 50 is where is this midpoint between both of these prices and these quantities supplied and demanded that will give us equilibrium price and quantity.
01:24
So now that we know the equilibrium price and quantity, we can sketch out our supply and demand, you could go through each point of, say, quantity demanded, quantity supplied, and price.
01:35
But we have a general idea of the minimum price and max price, and then the minimum demanded or supplied and the maximum.
01:42
Right.
01:42
So as long as we get our equilibrium quantity and price correct, that'll be pretty good for us...