Graphing Supply and Demand with linear equations
The market for labour can be described by two linear equations. Demand is given by P=150 - (1/6)Q and the supply given by P=50 + (1/3)Q
a)Graph the functions and calculate the equilibrium price and quantity
b) suppose a price is estabilished by the government in this market at a price of $120. (This price is above the equlibrium price that you have obtained in part a). Calculate the amount that would be demanded and supplied and then calculate the excess supply of workers
Here is my work so far:
p=150 - (1/6)Q
p=50 + (1/3)Q
150 - (1/6)Q = 50 + (1/3)Q
150 - 50 = (1/3)Q + (1/6)Q
100 = 3/6Q
100 = 1/2Q
200 = Q
Am I on the right track? What should I do next? thanks for any help
Re: Graphing Supply and Demand with linear equations
Correct! Now that you have the equilibrium quantity, find the equilibrium price P by using that Q into any of the given equations.
Then, for the second part, put P = 120 and find Q using both equations. Using the first equation, you will get the quantity demanded and using the second equation, you will get the quantity supplied.
The positive difference is the excess supply of workers.