Tuesday, 6 August 2013

algebra precalculus - Slope calculation misunderstanding for linear function



In my Math book I'm solving a case where this is the situation:



"The demand curve for good X is linear. At a price (p) of 300 the demand is 600 units. At a price of 680 the demand is 220 units. Also the supply curve for good X is linear. If the price is 400 then the supply equals 200 units, whereas for a price of 800 the supply will be 1000 units."



I'm asked to formulate the system of equations.



For the demand function I did:




SLOPEqd = delta y / delta x = -1 (delta y 680-300, delta x 220-600)



Which I could use and verify by the coordinates and I got the formula Demand(x) = -x + 900)



If I do the same for the supply function I end up wrong:



SLOPEqs = delta y / delta x = 0.5 (delta y 800-400, delta x 1000-200)



If I try to verify this for the first supply point (800, 1000) I would get:




Supply(x) = 0,5x + 600 but this is incorrect for the second point (400, 200). In the answers I found the slope for the supply function should be 2 instead of 0,5. Why is this? I think I'm overlooking something super obvious, but please enlighten me.



(sorry, I haven't figured out how to write the equations as fancy as I see them in other questions)


Answer



You have your x and y co-ordinates the wrong way round. Supply is your y co-ordinate (dependent variable) and Price is you x co-ordinate (independent variable) so you should have



Δy=1000200=800



Δx=800400=400




Slope =ΔyΔx=800400=2



Supply =2×Price 600



You had your x and y co-ordinates the wrong way round in your Demand calculation as well, but since the slope there is 1 whichever way round you have the co-ordinates, this did not matter.


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