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Function On Business

This document discusses key concepts in math for business including demand functions, supply functions, and market equilibrium. It defines demand functions as showing the relationship between quantity demanded and price, generally expressed as Qd=a-bP. Supply functions show the relationship between quantity supplied and price, generally expressed as Qs=a+bP. Market equilibrium occurs when quantity demanded equals quantity supplied (Qd=Qs) and price demanded equals price supplied (Pd=Ps). Examples and practice problems are provided to demonstrate these concepts.

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Prasetyo Hartanto
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67 views14 pages

Function On Business

This document discusses key concepts in math for business including demand functions, supply functions, and market equilibrium. It defines demand functions as showing the relationship between quantity demanded and price, generally expressed as Qd=a-bP. Supply functions show the relationship between quantity supplied and price, generally expressed as Qs=a+bP. Market equilibrium occurs when quantity demanded equals quantity supplied (Qd=Qs) and price demanded equals price supplied (Pd=Ps). Examples and practice problems are provided to demonstrate these concepts.

Uploaded by

Prasetyo Hartanto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MATH FOR BUSINESS

BAB 2. MATH FUNCTION ON BUSINESS

by:
Prasetyo Hartanto, S.E.,M.M.
OUTLINE

Demand Function

Math for Business


DEMAND FUNCTION

Demand Function :
 demand in terms of function shows the relationship between the quantity
of goods demanded at various price levels (Ceteris Paribus)
 The effect of price on the quantity demanded follows the law of demand
which states that if the price of an item increases, the quantity demanded
of a good decreases

Math for Business


DEMAND FUNCTION

In general, the demand function is expressed by:

Qdx = a – bPx

Description :
Qdx = Total of demand quantity
Px = Selling price of goods / Unit
a = constant
b = Slope

Math for Business


DEMAND FUNCTION FORMULA

Q – Q1 = P – P1
Q 2 – Q1 P2 – P1
PRACTICE

 When the price of goods is Rp. 5 / unit, the quantity demanded is 30 units. an increase in the price of goods to
Rp.10 / unit, causes the quantity demanded to decrease to 20 units.
The Questions :
1. What is the demand function of the item and describe it?
2. Determine how much of the good is demanded at the prices of Rp. 8 and Rp. 12?
3. If the number of items desired is 35 units, what is the selling price that should be set?
OUTLINE

Supply Function

Math for Business


SUPPLY FUNCTION

Supply Function :
 Supply in terms of the supply function shows the relationship between the number of goods offered and the
price level (Ceteris Paribus).
 The effect of price on the quantity supplied follows the law of supply which states that if the price of an item
increases, the quantity supplied will increase (Ceteris Paribus).
SUPPLY FUNCTION

In general, the supply function is expressed by :

Qsx = a + bPx

Description :
Qsx = number of items offered
Px = Selling price of good / unit
a = constant
b = slope
PRACTICE

When the price of goods in the market is Rp 5 / unit, none of the producers are willing to offer their goods in the
market. when the price of goods is increased to Rp 10 / unit will cause an increase in supply by 20 units.

The Questions :
1. Determine how the supply function and describe it!
2. Determine how many items are offered when the price of goods is Rp 50 / unit!
3. At what price should the good be sold if the quantity supplied is 50 units?
OUTLINE

MARKET EQUILIBRIUM

Math for Business


MARKET EQUILIBRIUM

 The interaction between supply and demand in the market results in a condition known as market
equilibrium
 Under conditions of market equilibrium, the following two conditions are produced:

1. quantity demanded is equal to quantity supplied (Qd = Qs)


2. the price of the goods demanded is the same as the price of the goods supplied (Pd = Ps)

 Graphically the condition of market equilibrium is shown by the following this graphic image.
PRACTICE

 Based on previous information where:


Qd = 40 – 2P and Qs = -10 + 2P
The Questions :
1. determine the market equilibrium price and quantity!
2. Draw a graph of the condition of the market equilibrium!
OUTLINE

THANK YOU!
An educated person has to be fair from the moment he thinks, especially in action

Math for Business

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