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# Applying Systems of Linear Equations

to Market Equilibrium: Steps &
Example
Businesses use market equilibrium to determine price and sell products. Learn
how to use systems of linear equations to find market equilibrium in this video
lesson. Review what you know with a short quiz!
LINEAR MODELS AND LEMONS
Max is a lemonade millionaire with his
Lemon. Max needs to understand
supply and demand so he can find
market
equilibrium. Market
equilibrium is when the amount of
product produced is equal to the
amount of quantity demanded. We can see equilibrium on a graph when the
supply function and the demand function intersect, like shown on this graph.
Max can then figure out how to price his new lemonade products based on
market equilibrium. Let's break this down one line at a time.
MARKET EQUILIBRIUM
This is the line of the supply function. On the graph, the y-axis represents the
price of a product, while the x-axis represents the quantity of the product. So
if we put a point at (10, 10) on this line, that would tell us that Max is willing
to supply 10 cups of lemonade if he can charge \$10 for each cup. This is a