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Combining Supply and Demand Economics 1
Balancing the Market <ul><li>Demand shows how much consumers are willing to buy at various prices </li></ul><ul><li>Supply...
Equilibrium <ul><li>The point where demand and supply come together at the same point or number </li></ul><ul><li>Point of...
How to Graph this… <ul><li>Equilibrium is shown in a supply and demand graph </li></ul><ul><li>Can be found where quantity...
Disequilibrium <ul><li>This occurs when quantity supplied is not equal to quantity demanded </li></ul><ul><li>It can eithe...
Excess Demand <ul><li>What does your picture look like?! </li></ul><ul><li>This occurs when quantity demanded is more than...
Excess Supply <ul><li>This occurs when quantity supplied exceeds quantity demanded=too many goods! </li></ul><ul><li>Can l...
Price Ceilings <ul><li>This is a max price, set by the gov’t, that sellers can charge for a good or service </li></ul><ul>...
Price Floors <ul><li>This is a minimum price, set by the gov’t, that must be paid for a good or service </li></ul><ul><li>...
Changes in Equilibrium <ul><li>Chapter 6 Section 2 p.133 </li></ul><ul><ul><li>Surplus </li></ul></ul><ul><ul><li>Shortage...
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Combining supply and demand

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Combining supply and demand

  1. 1. Combining Supply and Demand Economics 1
  2. 2. Balancing the Market <ul><li>Demand shows how much consumers are willing to buy at various prices </li></ul><ul><li>Supply shows how much sellers are willing to sell at various prices </li></ul><ul><li>This will give us a common ground! AKA Equilibrium!!!! </li></ul>
  3. 3. Equilibrium <ul><li>The point where demand and supply come together at the same point or number </li></ul><ul><li>Point of balance between price and quantity </li></ul><ul><li>The market for a good is stable at equilibrium </li></ul><ul><li>Look for the price at which the quantity supplied equals the quantity demanded </li></ul><ul><li>What does your picture look like?! </li></ul>
  4. 4. How to Graph this… <ul><li>Equilibrium is shown in a supply and demand graph </li></ul><ul><li>Can be found where quantity supplied equals quantity demanded, or the point where the supply curve crosses the demand curve </li></ul>
  5. 5. Disequilibrium <ul><li>This occurs when quantity supplied is not equal to quantity demanded </li></ul><ul><li>It can either cause excess demand or excess supply </li></ul>
  6. 6. Excess Demand <ul><li>What does your picture look like?! </li></ul><ul><li>This occurs when quantity demanded is more than quantity supplied </li></ul><ul><li>A low price encourages buyers and discourages sellers! </li></ul><ul><li>This problem can be fixed by suppliers raising the price of a good </li></ul>
  7. 7. Excess Supply <ul><li>This occurs when quantity supplied exceeds quantity demanded=too many goods! </li></ul><ul><li>Can lead to lower prices in order to encourage stronger demand for a good </li></ul><ul><li>Remember! Companies still want their money! </li></ul>
  8. 8. Price Ceilings <ul><li>This is a max price, set by the gov’t, that sellers can charge for a good or service </li></ul><ul><li>Usually put on goods that could become too expensive </li></ul><ul><li>Rent Control-helps people live in neighborhoods that they otherwise could not afford…ex. San Francisco! </li></ul>
  9. 9. Price Floors <ul><li>This is a minimum price, set by the gov’t, that must be paid for a good or service </li></ul><ul><li>Minimum Wage-the lowest a worker can be paid </li></ul><ul><li>How can this lead to unemployment though?! </li></ul><ul><li>This is good for farmers though! </li></ul>
  10. 10. Changes in Equilibrium <ul><li>Chapter 6 Section 2 p.133 </li></ul><ul><ul><li>Surplus </li></ul></ul><ul><ul><li>Shortage </li></ul></ul><ul><ul><li>Search Costs </li></ul></ul><ul><ul><li>How are the graphs that show the change in demand and supply different from what you already know?! </li></ul></ul><ul><ul><li>Complete the Section 2 Assessment </li></ul></ul><ul><ul><ul><li>1-5 </li></ul></ul></ul>

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