Final answer:
The student is working with equations representing supply and demand, using algebra or graphs to find market equilibrium of price and quantity.
Step-by-step explanation:
The question deals with the concepts of supply and demand in economics, which we can address using algebra and graphical methods. When we equate the quantity demanded (Qd) with the quantity supplied (Qs), we get a system of equations.
By following the algebraic method, we can manipulate the given equations to find the equilibrium point where the market price and quantity satisfy both the demand and supply. This involves setting the demand equation (Qd) equal to the supply equation (Qs) and solving for price (P) and quantity. Additionally, utilizing graphs, we can visually determine where the two curves intersect, representing the equilibrium price and quantity, confirming the results obtained through algebra.
The equation is: Q = 25 - 5P + 0.32M + 12PR
Where Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related goods. The equation shows how the quantity demanded changes with changes in price, income, and the price of related goods.