Lines And Slopes Worksheets With Answers - Hec Montreal Page 5

Example 2

The equilibrium quantity and the equilibrium price of a product are determined

by the point where the supply and demand curves intersect. For a given product,

the supply is determined by the line

30 – 45

and for the same product, the demand is determined by the line

855.

Determine the price and the equilibrium quantity and trace the supply and

demand curves on the same graph.

Solution :

We must determine the coordinates of point (q,p), situated at the intersection of

the two lines. This point must therefore satisfy both the supply and the demand

equations. The solution to this problem is to solve :

30 – 45

855

Thus,

855

900

and

30 20

555

The equilibrium price and quantity are therefore $20 and 555.

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