I really hate doing homework for people, so I'll try and give you some pointers.
You're taking/studying econ, right? You're familiar with supply and demand curves, yes? At least with the concepts that the cheaper something is, (theory says) the more people will demand it, and that for every price "garnerable" from a market, there is a certain quantity of goods that the market will want to supply?
Basically, your general demand curves go down and to the right, if price is on the y (vertical) axis and quantity demanded is on the x (horizontal) axis. As the price goes up (move up on the vertical axis), the number of people willing to buy at that price goes down (move left on the horizontal axis).
Supply curves are the opposite, they move up and to the right (same axes definitions). The more price that can be asked for an economic good, the more quantity that will be supplied to the market. (Because lots of people will want to be in that business since the potential profit is so good.)
Equilibrium in a market is when you have a price point where exactly as much demand as supply exists. So you need to find a price point where your supply and demand curves meet. You need to plot out your curves and figure out where they intersect. This is your equilibrium price.
Do you know how to do algebra? You have two equations.
For your demand curve, price = 400 - 3(quantity).
For your supply curve, price = 100 + 2(quantity).
These are both linear equations (straight lines). You need to find P such that it satisfies both equations for some Q.
Hope this helped!
P.S. When you figure it out, let me know and I'll tell you if you got it. Good luck!
16 Dec 2011, 6:45 pm
