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How to determine the equilibrium price and the equilibrium volume

How to determine the equilibrium price and the equilibrium volume

We all know that such a market.

Each of us makes a purchase on a daily basis. From small - buy a ticket on the bus, to large-scale - the purchase of houses, apartments, land rent.

Whatever the market structure: trade, stock - all of its internal mechanisms in essence are the same, but nevertheless require special attention, as a person can not do without market relations.



To find the equilibrium a price and the equilibrium volume, determine the number offactors. Such as the quantity demanded and the quantity offers. These market mechanisms just affect the balance. There are also different market structures: monopoly, oligopoly and competition. On monopoly and oligopolistic markets to calculate the equilibrium a price and the volume does not follow. In fact there is no balance or not. The company has a monopoly sets itself a price and the volume of production. In some oligopoly firms together in a cartel as well as the monopoly control these factors. But in the competition, everything happens according to the rule of the "invisible hand" (by supply and demand).


Demand - a buyer need for anyproduct or service. It is inversely proportional to the price and therefore the graph the demand curve has a negative slope. In other words, the buyer is always striving to buy a larger amount of products at a lower price.


Number of finished goods and services to put onsellers market - this proposal. In contrast to the demand, it is directly proportional to the price and has a positive slope in the graph. In other words, sellers eager to sell a greater number of goods at a higher price.


It is supply and demand at the point of intersectionchart is treated as balance. What is the demand that the proposal in the problems described by the functions in which the two variables are present. One price, another - volume production. For example: P = 16 + 9Q (P - value, Q - v). To find the equilibrium a price should equate the two functions - supply and demand. Finding equilibrium a price, It is necessary to substitute any of the formulas and calculate the Q, we have the equilibrium volume. This principle applies in reverse: first calculate the volume, then the price.


Example: It is necessary to determine the equilibrium a price and the equilibrium volume, if it is known that the magnitude of the demand and supply functions are described: 3P = 10 + 2Q and P = 8Q-1, respectively.
1) 10 + 2Q = 8Q-1
2); 2Q-8Q = -1-10
3); - 6Q = -9
4); Q = 1.5 (this is the equilibrium volume)
5); 3P = 2 * 10 + 1.5
6); 3P = 13
7); P = 4.333

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