Economic Equilibrium Calculator

How to Use the Calculator

1. Enter the supply function parameters (a and b) where Qs = a + bP
2. Enter the demand function parameters (c and d) where Qd = c - dP
3. Click the "Calculate" button to find the equilibrium price and quantity
4. The calculator will display the equilibrium price (Pe) and equilibrium quantity (Qe)

Understanding the Formulas

The calculator uses the following formulas:

Supply: Qs = a + bP

Demand: Qd = c - dP

Equilibrium occurs where Qs = Qd, which gives us:

Pe = (c - a) / (b + d)

Qe = a + bPe

Example

If the supply function is Qs = 10 + 2P and the demand function is Qd = 50 - 3P:

Supply Intercept (a) = 10
Supply Slope (b) = 2
Demand Intercept (c) = 50
Demand Slope (d) = 3

Calculating equilibrium:

Pe = (50 - 10) / (2 + 3) = 40 / 5 = 8
Qe = 10 + (2 * 8) = 10 + 16 = 26

So the equilibrium price is $8 and the equilibrium quantity is 26 units.

Limitations

Make sure that the supply slope (b) and demand slope (d) are positive numbers and not equal to each other, as this would create an infinite equilibrium price.