Question

iv) Graph both the supply and demand functions below and determine the market equilibrium point. Label both graphs clearly and use a straight edge to graph. 90 70 50 30 10 10 20 30 40

Answer 1

Sufply fanction Demand function p="-24+95- Here > ) = ५+5 »p=44+5 2price in $ and q=no. of units- i). if þ= $53 then स् कियकल 53=49+5 :49=53-s = 48 12 inits 1-49,+5 are sepplied. ) 6) demmd £ p =-24+1 +95 453=-24+95 24= 95-53 itst An are demendod =2i umits i> Svina21 units are dimåndad beut just 12 uinis ari supplied Hence it givasaa_shostfall. the prico s Since the demind is mare theiefere likely to Σ Δi. incres. 2=49+5 tohen q=07p=5 =57p%=D2S ==24+95 whin g=0 Densand funchion = 85 when Lath put p herizontal axis the Vestical axis and q on the and the graph s : on

14repply functien 95- got market equili briuma (15,65) 60+ 40+ 30+ Demand fenction 10 20 30 чо t00 Marget equilibriumiz It when supply = occuss demmd. 49+5 = -24+95 5 umits and hence p=$65 Se mesket equilihium is at qE15 mit andp=$65.