Site Loader

When activity takes place in the market, there is a demand and supply function formula. The formula for the function of the Demand and Supply Functions can be viewed from various points of view. The demand function itself is a mathematical study designed to analyze consumer behavior and the price of goods or services.

Functions, purposes and uses of economic mathematics The mode is the calculation in statistics, know the formula. It is different from the power supply function. Producers use the supply function to analyze the possible quantity of goods they will produce. However, if you don’t discuss the formula for the supply and demand function in more detail, it’s incomplete.

Definition of the Request Function

Before discussing the formulas for supply and demand functions, you should first understand the basic knowledge of supply and demand one by one. In the first place, that is the meaning of demand. Demand arises when there is a need to buy goods or services. However, it should be emphasized that this desire must be accompanied by the ability of consumers to pay for the goods or services they need.

In this request, there are three things that need to be considered. First is the quantity needed, then the demand that accompanies the ability to pay, and finally, the quantity required is expressed in units of time.

The quantity demanded shows how much the basis for the demand for goods or services, prices, consumer tastes, and prices for substituted goods or other goods that can be substituted for goods. Even though it is stated in units of time, the amount required must be accompanied by a period of time for the number of items needed, the time unit can be in the form of days, weeks, months or years.

The Law of the Demand Function

The law of demand is an explanation of how requests work. The demand rule states that if the demand for goods or services decreases, then if the price of the goods or services falls, the quantity can be greater; and if the price increases, the quantity demanded will also decrease, or it is often called ceteris paribus.

Request function

request function

Then, proceed to request the form of the function. The demand function itself is a function that shows the relationship between the quantity of goods and services demanded by consumers and the price of these goods or services. The demand function actually obeys the law of demand, so that when the price of a good rises, the quantity demanded falls.

At the same time, when the price of the commodity falls, the quantity demanded will increase. This indicates a negative correlation between commodity prices and demand. This is why it doesn’t matter if the request function is always negative. Here’s a look at the request function:

P = a-bQ

Q = a-bP

  • a = constant
  • b = slope / slope / slope
  • P = unit commodity price
  • Q = quantity of goods requested

The definition of the offer

Enter the next stage to discuss the formula for the supply and demand function. If demand has been explained previously, it is also necessary to understand what supply is. Supply is the amount of available goods and services that producers provide to consumers. Withdrawals occur at any price level (ceteris paribus) within a certain period of time.

Availability of supply depends on various factors, such as the relationship between the price of raw materials and the number of producers in the market. Apart from these factors, price is also one of the most important factors determining supply. This is consistent with what the law of supply says.

Bidding method

request function

In the law of supply, it is stated that if the price of goods and services increases, the quantity supplied will also increase or more. Vice versa, if the price of goods and services falls, the quantity supplied will decrease.

Provides functions

The supply function itself is a function that represents the relationship between the price of a commodity in the market and the quantity supplied by producers. As stated in the law of supply, when the price of goods and services increases, the quantity supplied also increases, and when the price of goods and services falls, the quantity supplied also decreases. This shows that the supply and price of goods provided are always positively correlated. This is why the supply function is always positive. The following is the form of the offer function:

P = a + bQ

Q = a + bP

  • a = constant
  • b = slope / slope / slope
  • P = unit commodity price
  • Q = quantity of goods requested

Equation of the demand function and supply function

Several points about the form of the supply and demand function have been explained previously. However, the form of the function is only its general form, and to find the function you have to use another formula. The following is the equation for the supply and demand function which is certainly easy to understand:

P-P1 = Q-Q1

P2-P1 = Q2-Q1

  • P = price Q = quantity
  • P1 = initial price Q1 = initial quantity
  • P2 = final price Q2 = final quantity

Special properties

The request function has several special attributes, including:

  • Negative demand function. That is, if the p value increases, the q value will decrease, and vice versa. Until one day the p value will reach the highest point (the highest price), and the point q will reach the lowest point (no commodity), on the other hand, if the p value reaches the lowest point (the price is 0 or free), then q will become a free commodity).
  • Linear functions and graphs. A point in the request function cannot be negative and cannot be very valuable. Limited (~), meaning that the request function is always in quadrant I.
  • The request function can be linear or curved. The demand function has a one-to-one function, that is, one point p is only used for one point q, and vice versa. For example, in the case of the price level of Rp. 500.00, the number of items needed is 5 pieces; with a price Level of Rp. The number of items requested at 100.00 is increased to 10 pieces.

Conclusion of Demand Functions

This is the discussion of the supply and demand function formula. Hopefully the above discussion can help you better understand about supply and demand. Now that you have studied the factors that influence the supply and demand for goods, we will now study how to achieve them through functions.

We already know in economic law that if the price rises – ceteris paribus – the demand will fall, and if the price falls – ceteris paribus – the demand will increase. Therefore, equations are often used in economics to simplify formulas and descriptions of various economic assumptions.

Increase Your Company Expenditure Management Efficiency Up To 76%. Collect data automatically, increase productivity and prevent financial fraud and take full control of company budgets easily anytime anywhere with JojoExpense. Faster, easier, hassle free.

Managing Client Data Made Easier. JojoExpense gives you easy access to your company’s finances no matter the time and place. Well you want to file request reimbursement or allow cash advance, all through your mobile phone.

You can submit your request directly or save it for later, for example if you want to double check your application. It all depends on you in charge of your own financial management. When you are seated at your desk, you can focus completely on the important tasks and leave side management to the automated process. Let’s use the expense management application from Jojonomic now. Get a free 14 days demo!

Post Author: Rachel Reinbauer

Leave a Reply

Your email address will not be published. Required fields are marked *