Final answer:
The demand and supply functions for an item can be graphically represented to find the equilibrium point. With the correctly rearranged equations for P, the demand curve shows a negative slope while the supply curve has a positive slope. The intersection point on the graph determines the equilibrium price and quantity.
Step-by-step explanation:
When solving models with graphs, the demand and supply curves can be drawn to find the equilibrium price and quantity. The demand function given as Qd = 2000 – 400P can be rearranged to P = 5 - 0.005Qd, showing a negative slope on a graph. Similarly, the supply function Qs = –100 + 350P rearranged to P = 0.2857 + 0.002857Qs displays a positive slope. The vertical intercepts for demand and supply are 5 and approximately 0.286, respectively, with the slopes being -0.005 for demand and 0.002857 for supply.
Drawing these on the same graph with price (P) on the vertical axis and quantity (Q) on the horizontal axis, we look for the point where the two curves intersect. This point of intersection represents market equilibrium where Qd = Qs. If the graphs are plotted accurately, they will cross at the equilibrium point, which can be found algebraically by setting the demand and supply functions equal to each other and solving for P and Q.