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
Market equilibrium D1(q) Market Market S-1(@)I demand supply s1(q)=(-c+q)d a-c b+d D-1(g)=(a-g)/b k ad+bc q q b+d
Market Equilibrium q D-1 (q), S-1 (q) D-1 (q) = (a-q)/b Market demand Market supply S-1 (q) = (-c+q)/d p a c b d * = − + b d ad bc q * + + =
Market equilibrium ◆ Two special cases: quantity supplied is fixed, independent of the market price, and Quantity supplied is extremely sensitive to the market price
Market Equilibrium ◆Two special cases: ⚫quantity supplied is fixed, independent of the market price, and ⚫quantity supplied is extremely sensitive to the market price
Market equilibrium Market quantity supplied is fixed, independent of price. S(p)=C+dp, so d=0 andS(p)≡c EC q
Market Equilibrium S(p) = c+dp, so d=0 and S(p) c. p q* = c q Market quantity supplied is fixed, independent of price
Market equilibrium Market Market quantity supplied is demand fixed, independent of price. S(p)=C+dp, so d=0 andS(p)≡c p D-1(g)=(a-g)/b gc q
Market Equilibrium S(p) = c+dp, so d=0 and S(p) c. p q p* D-1 (q) = (a-q)/b Market demand q* = c Market quantity supplied is fixed, independent of price