Maths help

cymatty

cymatty

cymatty

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I have this question to do and it makes zero sense to me and is not covered in the textbook and it is getting very frustrating, hope someone can help:)


The supply in wheat in the UK is given the function Q=9+0.07p and the demand by D=27-0.14p where Q and D are in millions of tonnes per year nd the price p is measured in £/tonne

At equilibrium, supply and demand are equal. What are the equilibrium values of price and supply
Click to expand...
 
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At equilibrium, the price for supply and demand are the same. So Q=D, which gives you:
9 + 0.07p = 27 - 0.14p
18 = 0.21p
p=£85.71/tonne (to 2 dp)

Equilibrium price is 9 + 0.07*(85.71), roughly £15/tonne.

Units of the equation seem a bit funny though, the constants 9/27 aren't defined with units. (having millions of tonnes per year on one side and £/tonne on the other isn't quite right!) Actually (upon edit) the whole thing seems to be worded strangely. Have a look at it, or take the maths with a pinch of salt.
 
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-- im not sure thats worded properly, and that kinda makes answering the q difficult...-- but the above looks right.. assuming the q is asking when demand and supply are equal
 
ojrules said:
-- im not sure thats worded properly, and that kinda makes answering the q difficult...-- but the above looks right.. assuming the q is asking when demand and supply are equal
Click to expand...

...is what people say when they don't understand... ;)

You're the guy that selects 'none of the above' on multiple choices :p.
 
Dave said:
At equilibrium, the price for supply and demand are the same. So Q=D, which gives you:
9 + 0.07p = 27 - 0.14p
18 = 0.21p
p=£85.71/tonne (to 2 dp)

Equilibrium price is 9 + 0.07*(85.71), roughly £15/tonne.

Units of the equation seem a bit funny though, the constants 9/27 aren't defined with units. (having millions of tonnes per year on one side and £/tonne on the other isn't quite right!)
Click to expand...

That is the question, it wouldn't be the first time they have asked something daft.

I follow the first line (9 + 0.07p = 27 - 0.14p) but then get lost, is there any chance you could explain how you got there. :)
 
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Robbie G said:
...is what people say when they don't understand... ;)

You're the guy that selects 'none of the above' on multiple choices :p.
Click to expand...
haha.. nah i get it, i was just reading it as "At equilibrium price and demand" rather than "At equilibrium, price and demand"...
 
cymatty said:
That is the question, it wouldn't be the first time they have asked something daft.

I follow the first line (9 + 0.07p = 27 - 0.14p) but then get lost, is there any chance you could explain how you got there. :)
Click to expand...

Subtract 9 from each side, and add 0.14p to each side.
 
Ok for B I have

Price elasticity of demand is given by the expression p/D * dD/dp what is the price elasticity at the equilibrium price £15
Click to expand...

= (dD / dP)*(P/D)
= (0.14)*(P/(27-4P)
= -0.14P/(27-0.014P)

Now I will substitute in the £15/tonne calculated above
= -0.14P/(27-0.014P)
= 2.1/27-2.1
=2.1/24.9
=0.084 3dp

Correct?
 
Shouldn't D and p be the same as before, where D is 15 and p is 85.714...?

Assuming my assumption is correct, then dD/dp = -0.14*(85.714/15) = -0.8

That's an exact number. Question setters tend to like nice numbers like that.
 
Going back to the original question.

The supply in wheat in the UK is given the function Q=9+0.07p and the demand by D=27-0.14p where Q and D are in millions of tonnes per year nd the price p is measured in £/tonne

At equilibrium, supply and demand are equal. What are the equilibrium values of price and supply
Click to expand...

Should there be two answers, one for price £15/tonne and one for supply?
 
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