Equilibrium price and quantity – An algebraic approach A3 A3 Suppose the supply of a good is given by the equation Q5 = -150 + 2P, and the demand for the good is given by
the equation Q” = 1,050 – 6P, where quantity (Q) is measured in millions of units per month and price (P) is
measured in dollars per unit. The equilibrium quantity in this market is 150 million units per month, and the equilibrium price is
$150 per unit. On the following graph, plot the demand curve using the blue line (circle symbols) and plot the supply curve using
the orange line (square symbols). Then place a black point (X symbol) at the equilibrium price and quantity. Dashed
drop lines will automatically extend to both axes. PRICE [Dollars per unit]
250 ‘ Equilibrium
x 100 150 QUANTITY [Millions in! units per month] @ m

0n the following graph, plot the demand curve usmg the blue line (Circle symbols) and plot the supply curve using
the orange line (square symbols). Then place a black point (X symbol) at the equilibrium price and quantity. Dashed
drop lines will automatically extend to both axes. PRICE [Dollars per unit]
250 Demand
—.—0—
200
Suwlv
H
150 — — _, ————————— g
| Equilibrium
l X
100 |
I
I
l
l
50 I
I
I
l
0 50 100 150 200 250
QUANTITV [Millions of units per month] Now suppose a change in consumer tastes results in a new demand curve given by the equation Q” = 1,200 – 6?)
The new equilibrium quantity in this market is units per month, and the equilibrium price is
per unit.