SS&FA/C - Equilibrium in the very short period - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY, CHENNAI - Dr.K.BARANIDHARAN

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SS&FA/C - Equilibrium in the very short period - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY, CHENNAI - Dr.K.BARANIDHARAN

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SS&FA/C - Equilibrium in the very short period - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY, CHENNAI - Dr.K.BARANIDHARAN

  1. 1. EQUILIBRIUM IN THE VERY SHORT PERIOD (OR) MARKET PERIOD ENGINEERING ECONOMICS & FINANCIAL ACCOUNTING CS FINAL YEAR & IT THIRD YEAR
  2. 2. Dr.K.Baranidharan Present by… 331-07-2013
  3. 3. Engineering Economics & Financial Accounting MANAGERIAL ECONOMICS 431-07-2013
  4. 4. EQUILIBRIUM IN THE VERY SHORT PERIOD (OR) MARKET PERIOD
  5. 5. • OP as the original market price, OQ the equilibrium quantity demanded and SS as the supply curve of mangoes. • The supply curve of mangoes for example is fixed in the market period and the supply cannot be increased. • When the demand for mangoes increase, demand curve DD shifts to D1D1.
  6. 6. • The price of the mangoes goes up from OP to OP1 because the supply is fixes. • The supply in the market continues to be SS though the demand has increased. • Because the supply is fixed in the market period, the price rise when the demand increases.
  7. 7. • When the demand decreases, the demand curve shifts to the left. • Demand curve DD shifts to the left and its D2D2 is the new demand as a result, the price falls. • Thus, demand decides the price in the market period as the supply is fixes and cannot be altered.
  8. 8. Dr.K.Baranidharan Thank you K YOU 931-07-2013
  9. 9. 1031-07-2013

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