00:01
So i'm going to write these equations for this market in millions.
00:03
So the quantity demanded is equal to 20 million minus four times the price, right? but it's really 20 million and 4 million, right? i'm writing everything in millions.
00:15
The quantity supplied is equal to 7 million plus 2 .5p, right? and the graph of this is going to look fairly straightforward.
00:31
But to see the graph, it's better to rewrite these in form of p, right? so here i have 4p equals 20 minus qd, or i have p equals to 5 minus 0 .25 qd.
00:48
For the supply side, i have 2 .5p equals to 7 minus qs.
00:55
P is equal to 7 over 2 .5 minus 0 .4 qs, that is 1 over 2 .5.
01:07
So now let's try to find the equilibrium price, right? we're going to set these things equal to each other.
01:16
So if i set the equilibrium 20 minus 4p is equal to 7 plus 2 .5p, we get 13 is equal to 6 .5p.
01:31
That means that p is equal to 2, and that means that quantity is equal to 12.
01:37
If you plug, i hate this whiteboard, if you plug 12 back into the demand equation.
01:44
So let me graph this now that we know what it looks like.
01:49
Quantity and price, the demand curve is going to start at five and slope downwards.
01:56
The supply curve starts at 7 over 2 .5.
02:03
And oh, sorry, this is a plus.
02:06
I'm missing.
02:11
Sorry, i had the supply curve backwards like an idiot...