Assignment

Date of Submission: November 30, 2019

Submitted by Submitted to

Mashfiq Tamim Course Instructor

ID: 19174024 BUS704, EMBA
BUS704, EMBA BRAC University
BRAC University
 Answer to Question No: A

The demand line represents through the following equation.

Demand Equation: Qd=100-5P

According to the equation ‘P’ represents Price and ‘Q’ represents quantity demanded. Considering the
equation the points for Qd and P would be as follows. Here, ‘P’ would be independent variable and ‘Q’
would be dependent variable.

Points P 2 3 4 5 6 7 8 9 10 11
for
Demand Qd 90 85 80 75 70 65 60 55 50 45
graph (P, Qd) (2,90) (3,85) (4,80) (5,75) (6,70) (7,65) (8,60) (9,55) (10,50) (11,45)

After pointing co-ordinates, the demand graph would look like this:

Demand Graph
12 11
10
10 9
8
8 7
6
Price

6 5
4
4 3
2
2

0
0 10 20 30 40 50 60 70 80 90 100
Quantity
Demand

Explanation:

The above figure represents the demand graph for the given demand equation. The X-axis represents
the quantity demanded and the Y-axis represents the price. According to the graph for the price at 10
units the quantity demanded is 50 units, for the price at 6 units the quantity demanded is 70 units, for
the price at 2 units the quantity demanded is 90 units etc.
The supply line represents through the following equation.

Demand Equation: Qs=10+5P

According to the equation ‘P’ represents Price and ‘Q’ represents quantity demanded. Considering the
equation the points for Qs and P would be as follows. Here, ‘P’ would be independent variable and ‘Q’
would be dependent variable.

Points P 2 3 4 5 6 7 8 9 10 11
for
supply Qd 20 25 30 35 40 45 50 55 60 65
graph (P, Qd) (2,20) (3,25) (4,30) (5,35) (6,40) (7,45) (8,50) (9,55) (10,60) (11,65)

After pointing co-ordinates, the demand graph would look like this:

Supply Graph
12 11
10
10 9
8
8 7
6
Price

6 5
4
4 3
2
2

0
0 10 20 30 40 50 60 70
Quantity
Supply

Explanation:

The above figure represents the supply graph for the given supply equation. The X-axis represents the
quantity demanded and the Y-axis represents the price. According to the graph for the price at 10 units
the quantity supplied is 60 units, for the price at 6 units the quantity supplied is 40 units, for the price at
2 units the quantity supplied is 20 units etc.
 Answer to Question No: B

The equilibrium price and quantity are demonstrated graphically bellow for the mentioned equation.

Detail on Demand Graph Detail on supply Graph

Equation: Qd=100-5P Equation: Qs=10+5P
Points for Demand
Points for Demand
Graph Graph
P Qd (P, Qd) P Qs (P, Qd)
2 90 (2,90) 2 20 (2,20)
3 85 (3,85) 3 25 (3,25)
4 30 (4,30)
4 80 (4,80)
5 35 (5,35)
5 75 (5,75)
6 40 (6,40)
6 70 (6,70) 7 45 (7,45)
7 65 (7,65) 8 50 (8,50)
8 60 (8,60) 9 55 (9,55)
9 55 (9,55) 10 60 (10,60)
10 50 (10,50) 11 65 (11,65)
11 45 (11,45)

‘P’ represents Price ‘P’ represents Price

‘Q’ represents quantity ‘Q’ represents quantity

Supply and Demand Graph Equilbrium

12 11 11
10 10
10 9
8 8
8 7 7
6 6
Price

6 5 5 Demand
4 4
4 3 3 Supply
2 2
2

0
0 10 20 30 40 50 60 70 80 90 100
Quantity

Explanation:

The above figure represents the demand and supply graph for the given equation for demand and
supply. The x-axis represents the quantity demanded and the Y-axis represents the price. At price 9 per
units the quantity demanded is 55 units and quantity supplied is 55 units. Therefore, according to the
graphical representation, the equilibrium is on at Price 9 unit and Quantity is 55 units.
 Answer to Question No: C

If the price happens to be 5 per unit the following adjustment would take place to bring about
equilibrium.

Adjustment of equilibrium
12 11 11 11
10 10 10
10 9 9
8 8 8
8 7 7 7
6 6 6 Demand
Price

6 5 5
4 4 4 Supply
4 3 3 3
2 2 2 New
2 supply

0
0 20 40 60 80 100 120
Quantity

Explanation:

If the price happens to be 5 per unit, the supply graph needs to be shifted to bring about equilibrium. As
the figure above states, the supply graph will have a rightward shift to bring about equilibrium at price 5
per units. The x-axis above states or demonstrates the quantity and the Y-axis represents the price.