ECONOMETRICS

OF DEMAND AND SUPPLY

Function, Schedule and Curve
 Qd = 300 – 5P
POINT Qd P
A 0
B 50
C 75
D 40
E 135
F 28
G 175
H 20
I 300
 How to get Qd:
Formula: Qd = a - bP Qs = 300 - 5P
= 300 - 5 (0)
Given:
= 300 - 0
Qs = 300 - 5P
If P = 0
Qd = 300
 How to get P:
Formula: Qs = a - bP Qs = 300 - 5P
0 = 300 - 5P
Given: 5P = 300 – 0
Qs = 300 + 5P 5P = 300
If Qs = 0 5 5
P = 60
 Qd = 300 – 5P
POINT Qd P
A 0
B 50
C 75
D 40
E 135
F 28
G 175
H 20
I 300
 Qd = 300 – 5P
POINT Qd P
A 0 60
B 50 50
C 75 45
D 100 40
E 135 33
F 160 28
G 175 25
H 200 20
I 300 0
 Qs = -400 + 80P
POINT Qs P
A 0
B 8
C 400
D 12
E 800
 How to get Qs:
Formula: Qs = -a + bP Qs = -400 + 80P
= -400 + 80 (0)
Given: = -400 + 0
Qs = -400 + 80P Qs = -400
If P = 0
 How to get P:
Formula: Qs = -a + bP Qs = -400 + 80P
0 = -400 + 80P
Given: 400 + 0 = 80P
Qs = -400 + 80P 400 = 80P
If Qs = 0 80 80
5=
 Qs = -400 + 80P
POINT Qs P
A 0
B 8
C 400
D 12
E 800
F 17
G 1200
 Qs = -400 + 80P
POINT Qs P
A 0 5
B 240 8
C 400 10
D 560 12
E 800 15
F 960 17
G 1200 20
 Qd = 450 – 7P
POINT P Qd
A 15
B 282
C 27
D 240
E 35
F 184
 Qd = 450 – 7P
POINT P Qd
A 15 345
B 24 282
C 27 261
D 30 240
E 35 205
F 38 184
 Qs = -500 + 50P
POINT Qs P
A 0 10
B 100 12
C 250 15
D 400 18
E 750 25
F 1000 30
• Q = 30 - 3P
• Q = 48 - 4P