Market equilibrium Market Market demand supply S(p)=c+dp a-c b+d D(p)= a-bp k ad+bc q D(p), s(p) b+d
Market Equilibrium p D(p), S(p) D(p) = a-bp Market demand Market supply S(p) = c+dp p a c b d * = − + b d ad bc q * + + =
Market equilibrium e Can we calculate the market equilibrium using the inverse market demand and supply curves? e Yes. it is the same calculation
Market Equilibrium ◆Can we calculate the market equilibrium using the inverse market demand and supply curves? ◆Yes, it is the same calculation
Market equilibrium q=D(p=a-bps>p a-g D(9 the equation of the inverse market demand curve, And q=S(P)=c+dp分p= c+a-s(a, d the equation of the inverse market supply curve
Market Equilibrium q D p a bp p a q b = = − = D q − = − ( ) ( ), 1 q S p c dp p c q d = = + = S q − + = − ( ) ( ), 1 the equation of the inverse market demand curve. And the equation of the inverse market supply curve
Market equilibrium D1(q) Market s1(q) Inverse Market inverse supply demand s1(q)=(-c+q)d At equilibrium, p D1(q)=S1(q“) D-1(g)=(a-g)/b q q
Market Equilibrium q D-1 (q), S-1 (q) D-1 (q) = (a-q)/b Market inverse demand S-1 (q) = (-c+q)/d p* q* At equilibrium, D-1 (q*) = S-1 (q*). Market inverse supply
Market equilibrium p=D-(q)= a-g b and p=s(a= q c d At the equilibrium quantity g*, D-1(p*)=s-1(p*) That is C+q b d ad t bc which gives q b+d a-c and p =d(g=s(9) btd
Market Equilibrium p D q a q b = = −1 − ( ) p S q c q d = = −1 − + and ( ) . At the equilibrium quantity q*, D-1 (p*) = S-1 (p*). That is, a q b c q d − = − + * * which gives q ad bc b d * = + + and p D q S q a c b d * * * = ( ) = ( ) = . − + −1 −1