How to Find Market Equilibrium From a Schedule

Reading equilibrium off a schedule

Some questions hand you a table of prices with the quantity demanded and quantity supplied at each one, rather than two equations, and the fastest method is to scan rather than solve.

Take this schedule, built from Qd = 120 − 5P and Qs = 20 + 15P: at $3, Qd is 105 and Qs is 65; at $4, Qd is 100 and Qs is 80; at $5, Qd is 95 and Qs is 95; at $6, Qd is 90 and Qs is 110; at $7, Qd is 85 and Qs is 125. Reading down the table, quantity demanded falls as price rises and quantity supplied rises as price rises, and the two columns meet at $5, where both read 95. That row is equilibrium: price $5, quantity 95, the same answer the equations give.

A real schedule will not always land on a matching row. If Qd is above Qs at $4 and the order flips by $6, equilibrium sits somewhere between $4 and $6. You can bracket it that closely from the table alone, and if you also have the underlying equations, solving Qd = Qs gives the exact price inside that range.

The rule to check either way is the same one that would flag a bad algebra answer if you solved this with equations instead: below equilibrium price, Qd exceeds Qs, and a shortage; above it, Qs exceeds Qd, and a surplus. Equilibrium is the single row, or point, where neither exists.

What a shift does to the solution

A shift in demand or supply changes one curve's numbers, whether that curve is a schedule column or an equation's constant term. Rebuilding the schedule, or resolving Qd = Qs with the new numbers when working from equations, finds the new equilibrium the same way as before.

Start from the equilibrium above: Qd = 120 − 5P and Qs = 20 + 15P give P* = $5 and Q* = 95. Now suppose demand rises at every price, for instance because incomes rise, and the new demand curve is Qd = 160 − 5P (the intercept moved from 120 to 160, the slope unchanged). Setting 160 − 5P = 20 + 15P gives 140 = 20P, so P* = $7. Substituting back, Qd = 160 − 5(7) = 125 and Qs = 20 + 15(7) = 125. Both price and quantity rose, from $5 to $7 and from 95 to 125 units.

That direction is not a coincidence. An increase in demand, a rightward shift, raises both equilibrium price and equilibrium quantity, because more buyers are competing for the same supply curve. An increase in supply does the opposite to price: it raises equilibrium quantity but lowers equilibrium price, since sellers are now willing to offer more at every price. A decrease in either curve reverses its own effect. When both curves shift at once, one of price or quantity moves in a direction you can state for certain and the other depends on the size of the two shifts, which is exactly why exam questions asking for both usually shift only one curve at a time.