I'm probably making a really stupid error (I often make those in numerical contexts!), but I'm having a bit of trouble with an introductory economics assignment that involves a little elementary algebra.(adsbygoogle = window.adsbygoogle || []).push({});

BACKGROUND: We learned about the supply-demand equilibrium - a price at which the quantity supplied equals the quantity demanded.

QUESTION: Suppose the demand & supply for apples is given by:

Demand: Q_{D}= 100 - 2P

Supply: Q_{S}= 50 + 3P

a) Solve for the equilibrium price and quantity for apples.

MY SOLUTION:

Well, I made both equations equal & solved for the unknowns:

100 - 2P = 50 + 3P

50 = 5P

P = 10

Since 50 + 3(10) and 100 - 2(10) both equal 80, then Q_{D}= Q_{S}= 80

And it seems all nice & what not, but then the next sub-question asks:

"With price on the vertical axis & quantity of apples on the horizontal axis, graph the demand & supply curves & illustrate the equilibrium price and quantity".

So, to try finding some points on the curve I tried to find the price at which demand would equal zero.

Q_{D}= 0 = 100 - 2P

2P = 100

P = 50

BUT 50 IS A LOWER PRICE THEN 80! And I was taught that the demand of a good goes up as it's price goes down, so this makes no sense. At 50, their should be more demand that at 80, NOT LESS!

Am I confusing something here?

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# Homework Help: Econ Math Problem!

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