How to Calculate Market Equilibrium | (NO GRAPHING)

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How to Calculate Market Equilibrium | (NO GRAPHING) | Think Econ

Рет қаралды 354,526

Күн бұрын

In this video we explain how to use the demand and supply equations to solve for the equilibrium price and quantity values (often referred to as P* and Q*) using just algebra! This is something which you will need to know how to do throughout your studies in economics, so it's definitely worth reviewing to ensure you understand it.
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KEYWORDS:
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Пікірлер: 269

@ThinkEcon 2 жыл бұрын

Don't forget to like the video and subscribe to the channel to see more economics content like this in the future! :)

@taiwohassan6506 Жыл бұрын

how can we solve this particular problem in excel

@ThinkEcon Жыл бұрын

@@taiwohassan6506 It depends. Are you trying to graph it in excel or simply solve using algebra in excel?

@taiwohassan6506 Жыл бұрын

@@ThinkEcon I am trying to solve it using algebra

@taiwohassan6506 Жыл бұрын

@@ThinkEcon and it's important, I do it , I have solved with hand but I need to solve with the equations in excel

@ThinkEcon Жыл бұрын

@@taiwohassan6506 Depending on the version of excel you have, there is a "solver" tool which allows you to input the two (Demand and Supply) equations and it will solve equilibrium P and Q for you.

@killerfrank8974 Жыл бұрын

Broken down so perfectly that even someone like me who's mathematically illiterate can understand it. Thank you; you've earned a new subscriber!

@ThinkEcon Жыл бұрын

I appreciate the kind words, and the subscription! It's really encouraging for me to hear that I'm making a positive impact on students learning about economics! :)

@marceloamado6223 Жыл бұрын

😂😂😂

@killerfrank8974 8 ай бұрын

@@prashnashrestha6861 What's so funny? Is everyone supposed to be great at math???????

@ThinkEcon 8 ай бұрын

@killerfrank8974 I was wondering the same thing 🥲

@prashnashrestha6861 8 ай бұрын

@@killerfrank8974 Yo mama😉

@bullshitbilly7738 Жыл бұрын

was battling to understand this by myself from my course notes, in a couple minutes you taught it to me perfectly. Thank you so much dear brother

@ThinkEcon Жыл бұрын

I'm glad I made everything crystal clear for you! I appreciate the feedback :)

@mikmak3450 Жыл бұрын

Fr me too ✨🙌🏼

@xasashee5115 Жыл бұрын

Have my Mid-term next week, your video helped me to finally understand how to calculate it, Thank you!

@ThinkEcon Жыл бұрын

I am really happy to hear that! These types of comments are so encouraging for us. Good luck on your midterm next week! :)

@renumalik0002 Ай бұрын

You are really a magician. I have tried studying this concept 2 years and till now i could not get this, but your explanation is next level, I appreciate you. thanks and much love ♥from INDIA 🕉

@ThinkEcon Ай бұрын

I'm really glad I was able to help! 🙂

@carsonleclerc7857 7 ай бұрын

I spent two hours trying figure it out just to come here and for you to explain it in two mins. Thank you

@ThinkEcon 7 ай бұрын

You're welcome! Glad I could help you out

@Nescnobody 4 ай бұрын

Thank you so much for this ! I’m currently taking Econ and I feel like I’m drowning.

@ThinkEcon 3 ай бұрын

It can feel overwhelming at times, no doubt. You’ve got this!

@cynthia3569 Жыл бұрын

I was struggling in solving this but fortunately for me your video has helped me to understand it very well, Thank you Soo much

@ThinkEcon Жыл бұрын

You're very welcome. I'm glad you found this video helpful! :)

@adyanchowdhury7196 Жыл бұрын

Thank you for helping me get ahead of my class :)🤫🤑🤑🤑

@ThinkEcon Жыл бұрын

It's what we're here for!

@owenthomas3621 2 жыл бұрын

Great video, Easy to follow along and understand

@ThinkEcon 2 жыл бұрын

Thank you! We appreciate the feedback and are glad you found it helpful! :)

@roshan5417 Жыл бұрын

thank you so much man tomorrow is my economics exam. Easily understood love from Nepal

@ThinkEcon Жыл бұрын

I'm glad the video helped! Good luck on your exam :)

@Therealdea0324 8 ай бұрын

I owe you one bro you saved my life merry Christmas

@ThinkEcon 8 ай бұрын

Glad you found the video helpful! :)

@JohnKirwai-jk2qk Жыл бұрын

😂😂 thanks so much this video was very helpful to me, it help me do my assignment with a clear understanding to work out my answer Love it...

@ThinkEcon Жыл бұрын

I’m glad it was helpful! :)

@GaurabBudhathoki-st2kv 5 ай бұрын

thanks you not only teach how to do it but you also taught how it actually works

@ThinkEcon 5 ай бұрын

I find that teaching how it actually works goes a long way when it comes to truly understanding the concept. I’m glad you found it helpful! ☺️

@MangokAchuil Ай бұрын

That's amazing I get what i was looking for

@ThinkEcon Ай бұрын

Glad I could help!

@user-vd1qd5rv7o 2 ай бұрын

Keep on the good work, you're amazing ❤❤

@ThinkEcon 2 ай бұрын

I appreciate the kind words! :)

@Pineapple10123 Жыл бұрын

I watched a few videos and was so confused... this one was incredibly easy to follow. Thank You!

@ThinkEcon Жыл бұрын

I’m really glad to hear that! You’re very welcome :)

@jenniferokwor-uk5jm Жыл бұрын

Waw Just waw Gosh, I've been cracking my brain on this, this just explain everything in minutes

@ThinkEcon Жыл бұрын

I’m really glad you found it helpful :)

@mahwishrizvi7073 8 ай бұрын

Helpful video sir, but I have a question (how to calculate elasticity of demand in this condition )

@shadirateb 3 ай бұрын

Thank you so much, you explain it in a good way 😊

@ThinkEcon 3 ай бұрын

Glad I could help! 😊

@mesfindessalegn-xx4oh 4 ай бұрын

👌perfect down to the last evry detail

@Zdiot 8 ай бұрын

Thank you it all looked like rocket science but now I fully understand

@ThinkEcon 8 ай бұрын

Glad to hear it!

@SiyambukaSyhaa 4 ай бұрын

Thank you very much this video helped a lot❤

@ThinkEcon 4 ай бұрын

I’m really glad to hear that! :)

@Anonymous-jp1uy Жыл бұрын

I got what I needed, thank you so much for your efforts

@ThinkEcon Жыл бұрын

Glad to be of service!

@mr.electron8218 4 ай бұрын

Thank you from India ❤❤❤❤

@ThinkEcon 4 ай бұрын

You’re welcome!

@primus4895 Жыл бұрын

u made the equation so easy ty ECON

@ThinkEcon Жыл бұрын

I'm glad you found it helpful!

@emmishadap9798 Жыл бұрын

Good teacher , thnk you

@DarthCoco Жыл бұрын

Explained and regathered so clearly. Thank you, and subscribed I have.

@ThinkEcon Жыл бұрын

Glad to hear it!

@shanzankhanshanzankhan4743 6 ай бұрын

I really appreciate your efforts

@ThinkEcon 6 ай бұрын

You’re very welcome ☺️

@JohnMichaelPagcaliwangan-oc8vs 8 ай бұрын

Sirr thankss you help me a lot when my teacher discuss this i can't understand because of my seatmate is so loud and annoying thanks A lot btw is this subject is economics?

@ThinkEcon 8 ай бұрын

Your seat mate is a negative externality to the class

@aneesaabdulqadir8264 Жыл бұрын

Thanks U are a life saver

@ThinkEcon Жыл бұрын

Glad the video helped! :)

@SedrickSupia 19 күн бұрын

Thanks for your help

@ThinkEcon 18 күн бұрын

You’re welcome!

@anirbankunduartho1391 Жыл бұрын

Thank you Love From Bangladesh 🤗😍

@johnmuyambu7794 Жыл бұрын

I enjoy your lesson may you assist me with economy lessons

@BoppieJotham-fo4pd Жыл бұрын

really helpful to my home work 💖

@ThinkEcon Жыл бұрын

Glad you found it useful! :)

@Paul-ft6kv 7 ай бұрын

Perfectly explained😊,the information is helpful

@ThinkEcon 7 ай бұрын

I appreciate the positive feedback!

@bensonkamau-ge3bp Жыл бұрын

What a good teacher

@ThinkEcon Жыл бұрын

I appreciate the compliment :)

@user-ev5mf4zg2y 10 ай бұрын

Thank you for helping me

@ThinkEcon 10 ай бұрын

You're welcome!

@marthaangwin2040 Жыл бұрын

Do I keep the negative & positive always on the side it presents itself in the original formula. for example 100-3p = 2p+20. So when we separate the constants and the P's the negative stays with the left and the positive with the right? Hope that makes sense.

@ThinkEcon Жыл бұрын

When you switch anything to the opposite side of the equals sign, you have to change the sign. So for 100 - 3P, the negative sign is attached to the 3P, and so when you move that to the other side, it becomes + 3P. Which would yield 100 = 2P + 20 + 3P. But you'll want to only have P terms on the right, so you would move that + 20 to the left, where it will become - 20. So now you have 100 - 20 = 2P + 3P. Does this help?

@juhiyadav5475 3 ай бұрын

Thank you so much you are awesome

@ThinkEcon 2 ай бұрын

I'm glad you found the video helpful!

@user-zn1vk3kf6h 5 ай бұрын

Thanks so much your video was literally helpful ❤

@ThinkEcon 3 ай бұрын

Glad to hear it! 😊

@axmadcilmi8763 5 ай бұрын

Good explanation

@ThinkEcon 5 ай бұрын

Thank you!

@Mwenyamukupa-qm8qc 5 ай бұрын

Thank you very much

@ThinkEcon 2 ай бұрын

You are welcome!

@komuhendopamela9844 9 ай бұрын

Thanks alot for sharing

@ThinkEcon 9 ай бұрын

You're welcome!

@aunisamenace Ай бұрын

where do you get the beginning equation from? the questions i'm working on have no equations only a data chart :/

@rohanaudaratage 7 ай бұрын

EXCELLENT EXPLANATION

@ThinkEcon 7 ай бұрын

Thank you!

@hafenihangula2270 Жыл бұрын

You hited the nails on the head 🙌.

@TaongaMwalwanda-jr4zx 2 ай бұрын

Thanks very much

@ThinkEcon 2 ай бұрын

You're very welcome!

@saimamukadam1507 Жыл бұрын

Thanks for sharing, this really helped!

@ThinkEcon Жыл бұрын

Glad to hear it!

@ayisatkassimabiodu3941 Жыл бұрын

So short thanks ☺️

@fclife Жыл бұрын

Thank you for the good work

@ThinkEcon Жыл бұрын

You're very welcome! Glad you enjoyed it :)

@allieex776 7 ай бұрын

Thank you so much

@ThinkEcon 7 ай бұрын

You're very welcome!

@calmingarts2932 3 ай бұрын

Why must the supply and demand balance out in a market equilibrium? What is meant by the equilibrium price? Why do you need to use the equilibrium price to work out the values for both p & q? Thank you.

@ThinkEcon 3 ай бұрын

The intuition is that in equilibrium, supply and demand equal each other and so at the equilibrium price there is no surplus or shortage of quantity in the economy! It's the price that makes the consumer AND producer both happy to engage in market activities. If the price is higher than equilibrium, the consumer is worse off and will demand less. Therefore there will be a surplus. If the price is lower than the equilibrium price then the producers will be worse off and supply less. In this case there would be a shortage! We call both of these cases "disequilibrium." Hope this helps :)

@calmingarts2932 3 ай бұрын

@@ThinkEcon Thank you very much :)

@hellenkasepa8135 9 ай бұрын

Thank you well explained

@ishmaelsmart1848 Жыл бұрын

This has really helped me

@ThinkEcon Жыл бұрын

I’m glad to hear that! :)

@benhailchiumia5069 Жыл бұрын

that's very helpful thanks, so how can we solve for complementary goods e.g Qd=410-5Ps-2Pj , Qs=-60+3Ps where Ps:price for slacks and Pj:price for jacket

@formanauto6034 3 ай бұрын

Good morning sir. What is 100 , -3p , 2p, in equation please explain it. Thanks

@ThinkEcon 3 ай бұрын

So as you'll see in the video, the supply and demand curves are actually linear. So the 100 and the -3P are actually the y-intercept and the slope, the same as if it was in y=mx+b form. Does this help?

@abmealeakaddis1494 Жыл бұрын

Thank you for your help and advice for equilibrium calculate basedon all these video is the best

@ThinkEcon Жыл бұрын

You're welcome! We are happy that you found the video useful :)

@shivangagal 6 ай бұрын

What would be the producer surplus for these functions? Would it be the area of the trapezoid as we would ignore the area below the x-axis (as y-intercept of supply function is -10)?

@renzzy4274 11 ай бұрын

Thank you super easy to catch up 😉

@Simon_Ijeoma1 Жыл бұрын

Find the equilibrium price and quantity for two complementary goods, shirts (S) and jackets (J). Using elimination method. (i) Qds = 410 - 5PS - 2Pj qsS = 60 + 3P Can you please solve this

@akshaysachu1672 Жыл бұрын

Thanks sir nice class this

@ThinkEcon Жыл бұрын

You're very welcome!

@ayabermudez2115 5 ай бұрын

Hi. Can you please talk about Taylor Rule.

@carlmega3879 Жыл бұрын

AM NOT GOOD AT MATHS BUT THIS WAS VERY HELPFUL SIR

@ThinkEcon Жыл бұрын

I’m really glad to hear that! :)

@foniyamasumba-kl8yh Жыл бұрын

Thank you 💕

@ThinkEcon Жыл бұрын

You're welcome!

@nksmlng 10 ай бұрын

thank you! this is really helpful

@ThinkEcon 10 ай бұрын

Glad to hear it! :)

@user-rw3yz9iu5d Жыл бұрын

Beautiful one there

@hibray_3505 10 ай бұрын

Qs = -20 + 6P = (?) 😢😢 Please

@jaylonger Жыл бұрын

I think that my answer is going to be 120 after collecting like term thanks for explaining

@ThinkEcon Жыл бұрын

You're welcome!

@mekdestsegaye9825 4 ай бұрын

Thank you

@ThinkEcon 2 ай бұрын

You're welcome!

@kavitanegi8855 Жыл бұрын

Thank you so much, it really helped me.🙏

@ThinkEcon Жыл бұрын

I’m glad to hear it!

@user-zr8kh5px3d 6 ай бұрын

Peace be upon you. I am from Iraq🇮🇶 and a Muslim, and I am sitting and reading from you, Professor. If you are a Muslim, press like

@JustYourAverageToes 4 ай бұрын

How does being muslim have to do anything about this

@albertmukwasibwe1075 4 ай бұрын

😂😂😂😂😂

@HusseinSumeya 3 ай бұрын

REALLY 😮

@bakaryahye8453 2 ай бұрын

What kind of hashish did u have ya calwi xabib qalbi 😂

@haulies957 Жыл бұрын

Thank you sir, it really helps😁

@ThinkEcon Жыл бұрын

I'm glad you found it helpful! :)

@agneselladenise 5 ай бұрын

thank you!

@ThinkEcon 5 ай бұрын

You're very welcome!

@user-nc5qr7tt7x Жыл бұрын

Excellent teaching 🙌

@ThinkEcon Жыл бұрын

Thank you very much :)

@janenelisafreitas6071 10 ай бұрын

You are amazing thank you so much

@dineomlotshwa6401 Жыл бұрын

So educational thank you

@Cocoa_miller25 Жыл бұрын

I have a query, if the demand function is in fraction what’ll we have to do then? I mean the equation is like this- QD= 1/2(5-p) QS= 2p-3 I’m confused as hell, and great video Btw (subscribed after watching this vid)

@ThinkEcon Жыл бұрын

We made a video about calculating equilibrium when there's fractions: kzfaq.info/get/bejne/mcuTf5h4kqipdIU.html Also, I appreciate the sub! Economics can be really confusing when you're first learning it, so I'm glad you are finding the videos helpful!

@Cocoa_miller25 Жыл бұрын

@@ThinkEcon thanks for providing the link 😭 and yeah economics is hard

@ThinkEcon Жыл бұрын

No problem! And yeah, it’s a tough subject, but very rewarding once you understand. Hopefully you’ll find some of our other videos helpful to get you through!

@priscillaidehenre3205 10 ай бұрын

@Cocoa_miller25 so hard , my brain hurts😢

@shikhabhakat Жыл бұрын

THANK YOU SO MUCH!

@ThinkEcon Жыл бұрын

You’re very welcome!

@zaneabideansyed3143 Жыл бұрын

awesome ..this helped me a lot ....

@ThinkEcon Жыл бұрын

Glad to hear it!

@Anshuismail Жыл бұрын

Thanks ❤

@ThinkEcon Жыл бұрын

You're welcome!

@krishnandanyadav9995 3 ай бұрын

I'm from Nepal.

@angellatitus2236 Жыл бұрын

Thanks 🙏 ❤

@ThinkEcon Жыл бұрын

You're welcome!

@sirjobertsvlog1221 6 ай бұрын

Where did the values 100 and 3 in Demand function came from?

@ThinkEcon 6 ай бұрын

The demand function will normally be given to you in the question. This particular one is just a random demand equation that I’ve made up for the video to illustrate how to calculate equilibrium. If you put the demean equation into y=mx+b form, then the 100 and 3 would represent the slope and y-intercept of the demand curve. Hope this helps!

@kara-vh7bk Жыл бұрын

Ok good now i understand

@ThinkEcon Жыл бұрын

Glad the video helped! :)

@farhadreza236 3 ай бұрын

Thanks

@ThinkEcon 2 ай бұрын

You're welcome!

@abba634 11 ай бұрын

Very good class. I subscribed. Please tell me what are the tools you are using here to present this topic. Expecting your reply.

@mavjudaotamurodova 11 ай бұрын

thank you very much. But what if it is a two-good economy? Will I have two equilibriums?

@ThinkEcon 11 ай бұрын

You’re welcome, and great question! So if you were given the supply and demand equations of individual goods, then yes, you’d be able to graph supply and demand equilibrium twice, once for each good. This would give you an equilibrium for each good. However, sometimes you’ll be asked to plot what’s called the market demand and market supply, which is all of the demand curves added up, and all of the supply curves added up for all individuals in an economy! Hope this helps :)

@mavjudaotamurodova 11 ай бұрын

@@ThinkEcon Yes, helpful. So grateful for your help))

@user-yg4xu8xs7m 7 ай бұрын

Thanks so much dear man

@ThinkEcon 7 ай бұрын

You're very welcome!

@palaviraj Жыл бұрын

Sukriya sir 🙏

@user-sr3fq3vs9d 5 ай бұрын

Sir I want to learn The chapter Function from 3rd year Economy Book

@DaudaYahaya-dc4er 5 ай бұрын

It was great but short

@ThinkEcon 2 ай бұрын

I tried to keep it straight to the point. No messing around on this video!

@rizadeleon5037 Жыл бұрын

Tomorrow will be my midterm exam and i’m still struggling to solve this

@ThinkEcon Жыл бұрын

Are you still struggling after watching? Maybe I can help in the comments..

@roshnydarlenz5348 Жыл бұрын

Thank you so much 🥺

@ThinkEcon Жыл бұрын

No problem! Glad I could help :)

@tagalogdub2481 Жыл бұрын

THANK YOU FOR THIS!

@ThinkEcon Жыл бұрын

YOU'RE VERY WELCOME! Glad you found it helpful :)

@najaefrink1868 Жыл бұрын

amazing!

@Transformingmindsmovement99 10 ай бұрын

Very well articulated

@ThinkEcon 10 ай бұрын

Thank you very much

@cheyennephillips2234 Жыл бұрын

THANK YOUUUUUUU 🎉

@ThinkEcon Жыл бұрын

You're very welcome!

@sangaydema3550 Жыл бұрын

Hello author! From where you get those numbers Qd=100-3p Qs=2p+20 or is it type of question?

@sangaydema3550 Жыл бұрын

Can you give me simple formula of equilibrium for grade 9 economics

@ThinkEcon Жыл бұрын

I just made up these particular equations for the example. In an assignment or on a test you would be given your own equations, and the steps to solve would be the same as what I've shown in this video. Hope this helps! :)

@sangaydema3550 Жыл бұрын

@@ThinkEcon thank you 🙏

@ThinkEcon Жыл бұрын

You’re welcome ☺️