Question

Price	Quantity Demanded	Quantity Supplied
60	118	95
70	111	98
80	106	102
90	101	106
100	98	110

Create the supply and demand graph in the space below. Also identify the price and quantity at which equilibrium exists. This information is important for the client to determine the quantity of oil to produce for profit maximization. Identify this information on the supply and demand graph you created below.

Answer 1

Demand and Supply grapg is following:

Linear trendline of Quantity demanded is: y = -0.5x+146.8

Linear trendline of Quantity supplied is: y = 0.38x+71.8

Equilibrium exists at a point where for same price, quantity demanded is equal to quantity supplier.

It is determined by equating the trendline equations of quantity demanded and quantity supplied.

=> -0.5x+146.8 = 0.38x+71.8

=> x = (146.8-71.8)/(0.38+0.5) = 85.23

Equilibrium Price (x) = 85.23 and

Equilibrium

Quantity demanded (y) = -0.5*85.23+146.8 = 104.2   

Quantity supplied (y) = 0.38*85.23+71.8 = 104.2