A Numerical Example

Changes in market equilibrium can also be examined by using a simple
algebraic model. For example, consider the (hypothetical) wholesale
market for potatoes in Atlantic Canada in 2019. The price is the dollar
price per crate and the quantity is the number of crates (in thousands).
The demand and supply curves are:

Notice that the many things shifting the demand curve (such as income,
tastes, etc.) are not explicitly shown in the demand equation. Instead,
their effect is already represented in the constant term of 100. The
demand equation shows that for every $1 increase in the price, quantity
demanded falls by three (thousand) crates per year. Similarly, the many
things shifting the supply curve are not shown explicitly, but their effect is
shown inside the constant term of 20. From the supply equation it is clear
that each $1 increase in the price leads to an increase in quantity supplied
of two (thousand) crates per year.

In order to determine the market equilibrium, we need to find the single
price at which By setting we get:

QD = 100 − 3 p

QS = 20 + 2 p

QD=QS. QD=QS,

100 − 3 p= 20 + 2 p