Supply and demand
The price where quantity demanded equals quantity supplied is the equilibrium. Level: standard.
Learning goals
- Read a demand line that falls as price rises.
- Read a supply line that rises as price rises.
- Move price toward the crossing point.
Simulation
Both lines are straight. Nothing in this page is a live market price.
Formulas
- Demand. Qd = 100 - 2 P
- Supply. Qs = 10 + P
- Equilibrium price. P* = (100 - 10) / (2 + 1)
Worked example: equilibrium price 30, quantity 40.
Quiz
Answers
- Equilibrium is the price where which quantities match? Answer: Quantity demanded and quantity supplied.
- A price above equilibrium leaves a what? Answer: Surplus.
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