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Market equilibrium
 

Market equilibrium

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    Market equilibrium Market equilibrium Presentation Transcript

    • Definition- here is no tT endencyforpr @ qtyt cha (pr &qtya ice t o nge ice t rest bl ) ae- A r is in equil ium w t maketDD cur e a t maket ibr hen he r v nd hemaketSScur e int sect r v er
    • Market Equilibrium- R t t int a ion bet een DD a SSin t maket(Qd = Qs ) efer o he er ct w nd he r- Pr a t pointofequil ium (equilibrium price) ice t he ibr- Qtya t pointofequil ium (equilibrium qtty) t t he ibr* the point of equilibrium is not s table or permanent*
    • Condition F or Market Equilibrium Qd = QsW Qd = Qs (maketw lnotbe in equil ium)t hen, r il ibr hisma ha in 2 cir a :- y ppen cumst nces a E SS(Sur us ) ) xcess pl b)E DD (Shora ) xcess t ge
    •  Exces s S S @ S urplus Qs > Qd- T ee impora effect hr t nt s:- aP) b)Qs w lcont a (Qs ) il r ct c)Qd w lexpa (Qd ) il nd
    •  Exces s DD @ S hortag e Qd > Qs- T ee impora effect hr t nt s:- aP) b)Qd w lcont a (Qd ) il r ct c)Qs w lexpa (Qs ) il nd
    • Determination Of market Equilibrium- T ee met hr hods i)Numer lA l ica naysis ii)Ga lA l r phica naysis iii)M t t l a l ahemaica naysis Qd = Qs a- bP = c + dP
    • Effects of chang es in DD on M’E Increas e DD DD ; F SS; equil ium P&Qty ixed ibr t Decreas e DD DD ; F SS; equil ium P&Qty ixed ibr t
    • Effects of chang es in S S on M’E Increas e S S SS; F DD ; eP; eQ ixed Decreas e DD SS; F DD ; eP; eQ ixed
    • Effects of chang es in DD & S S on EqualMag nitudes on Market Equilibrium- F sit t :- our uaions a DD &SSin equa ma udes ) l gnit b) DD &SSin equa ma udes l gnit c) DD & SSin equa ma udes l gnit d ) DD & SSin equa ma udes l gnit
    • a DD &SSin equa ma udes ) l gnit DD & S S ; eQ ; c ons tant ePb) DD &SSin equa ma udes l gnit DD & S S ; eQ ; c ons tant eP
    • c) DD & SSin equa ma udes l gnit DD & SS ; eP ; c ons tant eQd ) DD & SSin equa ma udes l gnit DD & SS ; eP ; c ons tant eQ