Thank you! I am an old lady back at school and this is so helpful. I never understood this 30 years ago but I get it now. Midterm this week and you have given me a bit of confidence:)
I'm really glad that this video helped you feel confident :) Going back to school can be tough when you're one of the older students in a class of 18-22 year olds but nonetheless good for you for doing so! You're never too old to learn, and I'm glad that we can make that easier by making these videos. Good luck on your midterm this week. Hoping you do well and that you recall everything you need to know. You got this!
That's the general equation of a line where Q is the Quantity, P is the Price, a is the y-intercept, and m is the slope of the line. Does that explanation help?
That equation, Qd= 100-3P represents the consumers quantity demanded for every price available. Qd = 52 at $16 is simply one of those combinations. The exact combination where producers (who make up the supply curve) are happy to supply 52 units at $16 as well. That’s why we call it market equilibrium!
@@ThinkEcon Yes, but .....who is going to give you that equation? Why isn't it 200-5P? Or 421-7.9P? Who came up with 100-3P? Is 100-3P a standard equation to be used for all goods? Or is it just used as an example in only this scenario? If so, who made it up and who would give you that as a starting point?
@terry7893 The equations are given in most questions, and scenario specific. In this scenario, I just made up those equations to showcase how to solve using the steps in the video. Any set of equations you get can be solved using this method, but yes, they’ll be given to you, and this particular one is random. Does that help?
@@ThinkEcon That's great if you're getting ready for a test and someone says you're going to have to solve an equation. But in the real world, how can you spot upcoming shortages and figure out how much the price is going up, or how much the demand is going down? For example, copper is thought to be rising a lot this year. How can I calculate how much it will probably go up? I know I might never hit it on the head, but how can I guesstimate it? And that said, there are certainly times when they say something will go up, but it ends up going down. Perfect example is cocoa. It's nearly tripled in price just since the beginning of this year due to a really bad growing season last year, and not but just one month ago they thought it was going way higher. Suddenly it's down 30% just within the last few weeks. How can I get a better barometer of prices on goods or commodities?
