An equilibrium answer is correct only if, at that price, quantity demanded equals quantity supplied. You can check this in under a minute by reading the original schedule or diagram.
This lesson is part of price mechanism with more than one change. It assumes you know how to find equilibrium from a schedule.
What are the three checks?
- Match check. At the price you found, are quantity demanded and quantity supplied equal?
- Diagram check. Does that price sit where the curves cross on your drawing?
- Direction check. Did price and quantity move the way your reasoning said?
If any check fails, the answer is wrong, even if the working looked tidy.
Worked example: a fictional mee stall market
A market for mee goreng has this schedule.
| Price | Quantity demanded | Quantity supplied |
|---|---|---|
| RM12 | 120 | 80 |
| RM14 | 100 | 100 |
| RM16 | 80 | 120 |
If your class uses equations, this schedule comes from demand Qd = 240 − 10P and supply Qs = 10P − 40. Solving Qd = Qs gives 240 − 10P = 10P − 40, so 20P = 280, P = 14, and Q = 100. The schedule agrees: equilibrium is RM14 and 100 plates.
The mistake: a sign slip the diagram exposes
A student writes the supply equation as Qs = 10P + 40 by mistake and solves 240 − 10P = 10P + 40. That gives 20P = 200, so P = 10 and Q = 140.
Now run the checks. At RM10 the schedule line for supply (10P − 40) gives 60, not 140. The match check fails: demand at RM10 is 140, supply is 60, so the market is in shortage at RM10, not balanced.
| Wrong working | Correct working | |
|---|---|---|
| Supply equation | 10P + 40 | 10P − 40 |
| Price found | RM10 | RM14 |
| Match check | Demand 140, supply 60, fails | Demand 100, supply 100, passes |
The diagram tells you immediately that RM10 is nowhere near where the curves cross, which is at RM14.
How do I check after a shift?
Suppose a cost rise cuts supply by 20 plates at every price, so new supply is Qs = 10P − 60. Solve 240 − 10P = 10P − 60, so 20P = 300, P = 15, and Q = 90.
Run the checks. At RM15, demand is 240 − 150 = 90 and supply is 150 − 60 = 90, so the match check passes. The direction check also passes: supply shifted left, so the price rises from RM14 to RM15 and the quantity falls from 100 to 90.
If your answer had the quantity rising after a supply fall, the direction check would flag it at once.
Check yourself
The demand schedule gives 100 plates at RM14 and 80 at RM16. Using the original supply Qs = 10P − 40, a student shifts supply right by 20, writes Qs = 10P − 20, and solves 240 − 10P = 10P − 20. Find the price and quantity and run the three checks.
Answer
20P = 260, so P = 13 and Q = 240 − 130 = 110.
Match check: demand at RM13 is 110, supply is 130 − 20 = 110, so they match. Direction check: supply shifted right, so the price should fall (RM14 to RM13) and the quantity rise (100 to 110). Both agree.
What to study next
Put the skills together with the cluster practice, and explore curves in the supply-demand diagram reasoning explorer.
To have a teacher check your calculations against your diagrams, see online one-to-one Economics tuition.