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Starting: supply curve $y=x+10$ and demand curve $y = -x+30$ with equilibrium at (10, 20).

The problem states that DEMAND shifts leftwards by 3 units and to find the new equilibrium. My professor did not specifically state the two equations, but a 1 to 1 relationship is implied, so I was able to find them.

(Meaning that for example, the original supply curve would be a line consisting of points $(10,20), (11,21), (9,19)$, etc. and the demand curve would have points $(10,20), (11,19), (9,21)$, etc. So slope of $1$ and $-1$)

With equilibrium at $(10, 20)$. My professor goes on to complete the problem by moving 3 units leftward from 10 on the x-axis and 3 units down from 20 on the y-axis. His new equilibrium is $(7, 17)$.

I didn't think that it was an accurate way to represent/find the new equilibrium. Supply/demand graphs are supposed to shift at every point. I then plugged it into a graph and found that it was incorrect.

DEMAND shifts leftwards by 3 to create a new DEMAND curve $y=-x+27$ with equilibrium at $(8.5, 18.5)$ which is not $(7, 17)$.

Was the professor wrong?

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  • $\begingroup$ What exactly do you mean by "My professor did not specifically state the two equations, but a 1 to 1 relationship is implied"? $\endgroup$ – Herr K. Feb 21 at 3:49
  • $\begingroup$ @HerrK. He said that for example, the original supply curve would be a line consisting of points $(10, 20)$, $(11, 21)$, $(9, 19)$, etc. and the demand curve would have points $(10, 20)$, $(11, 19)$, $(9, 21)$, etc. So slope of 1 and -1. $\endgroup$ – econguy Feb 21 at 3:53
  • $\begingroup$ Edited question to make sense $\endgroup$ – econguy Feb 21 at 4:05
  • $\begingroup$ It does seem like your professor was mistaken. $\endgroup$ – Herr K. Feb 21 at 4:20

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