linear demand and supply.

freeze4real

guys im havibg troubles with this linear supply and demand.
its more of economics in maths or maths in economics.

Demand equation: P = -2Q + 30
Supply equation: P = 4Q2 + 12



(a)
Graph the demand function as well as the supply function and explain whether these functions appear reasonable from the perspective of standard microeconomic theory.
(b)
Solve the above market model for the equilibrium quantity of bread (Q*) as well as the equilibrium price of bread (P*). Firstly, use a graph to identify Q* and P*. Secondly, compute Q* and P*.
(c)
Consider the price P0 = 13. Explain why this price is not the equilibrium price for the above market model.




This was what i had.

demand function = -2Q + 30.

bring -2Q to the right = 30
so Q = 30/2 = 15.

Am I right ?

I'M REALLY DESPERATE.

thanks

LeixlipRed

I know nothing about economics but this looks like easy stuff. The first part, did you graph the two functions? The second part, I assume the P* and Q* are just the coordinates of the point of intersection of the two lines?

freeze4real

LeixlipRed wrote: »

I know nothing about economics but this looks like easy stuff. The first part, did you graph the two functions? The second part, I assume the P* and Q* are just the coordinates of the point of intersection of the two lines?

I asked one of my mates nd he said
supply = demand

meaning 4Q2 + 12 = -2Q + 30

therefore 4q2 - 2Q - 18 = 0

by the way its 4Q squared.

Am i close.

I am trying to use this equation below to solve it.
[Embedded Image Removed]

LeixlipRed

Well I assume that's what it means. Your equation is not right though, check your workings. So what type of equation is it and how would you solve it?

freeze4real

LeixlipRed wrote: »

Well I assume that's what it means. Your equation is not right though, check your workings. So what type of equation is it and how would you solve it?

I have followed every instruction from the notes or lecturers example. and the only place were i might be wrong is in the equation itself.

could this be wrong 4q2 - 2Q - 18 = 0

LeixlipRed

It is wrong yes, that's what I meant. Look at your workings again:

4Q^2 + 12 = -2Q + 30

What happens to the -2Q to bring it to the other side?

freeze4real

Yes I bought it to the other side.

LeixlipRed

Yes but what is "bringing it to the other side"?

x-5 = b
how do I bring b to the other side?

x-5-b=b-b

By subtracting b from both sides!

x-5-b=0

The b has gone from b on the right to -b on the left.

Where are you studying? Does your institution have a maths support centre or somewhere you can get help with basic mathematics? You seem to have a poor grasp of the basic manipulations required for this economics stuff and I can't see you being able to handle more complex mathematics later on in your degree.

freeze4real

It was a typing error it meant to be +2Q.

I study finance an economics but I'm not doing maths. There's a maths support but its too late for that now.

LeixlipRed

Yes but all finance and economics is based on mathematical principles. Or so they'd have us believe It wasn't a criticism but if you want to progress with the subject you'll need to get your maths in order! Anyway, how do you solve this equation then? What type of equation is it firstly?

freeze4real

I still don't know.

What do you mean what type of equation is it ?

LeixlipRed

An equation of the form: ax + b = c is called a linear equation. What type of equation does this look like?

freeze4real

sorry so the new eqn is 4Q2 + 2Q - 18 = 0

freeze4real

so i am using this -b +/- formular from this link.

http://www.enchantedlearning.com/math/algebra/quadratic/

D-Generate

a) You should know how to graph these so no explaining this

b) At equilibrium I imagine supply = demand
4Q^2 + 12 = -2Q + 30
4Q^2 + 2Q - 18 = 0
2Q^2 + Q - 9 = 0
Solving for Q gives two results, take the positive
Q = 1.886
Substitute this back in to either equation and
P = 26.228
This should also be roughly the intersection of the supply and demand curves I imagine.

c) Eh not equilibrium because to be equilibrium it needs to be 26.228?

To be honest, you shouldn't be going near economics if you don't have any grounding in maths. You don't need a strong maths background but it should be decent enough that the above is trivial. Jesus, looking at that I question the quality of the questions in the exams....

freeze4real

You're a legend i was doing this but I got some vital bits wrong.

My mate just showed me the exact stuff on
Msn.

Thanks lads

I have to work my maths.

click_here!!!

Usually demand equations are of the form:
Q = -a*P + b

And supply equations are of the form:
Q = c*P + d

Where a, b, c and d are positive numbers, and P is the price per unit.

To find the equilibrium price and quantity on the diagram: just draw the D and S lines and see where they intersect.

To find the equilibrium price using algebra:
Let Q of supply = Q of demand:
-a*P+b=c*P+d
And solve for P.

Sub P into one of the two equations given to find the quantity.