ch04.1 arz ve talep eğrileri micro s-d theo.ppt

1. 2
SUPPLY AND DEMAND I: HOW MARKETS WORK

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4
The Market Forces of Supply
and Demand
Assoc Prof Ergin Akalpler

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Figure 1 Catherine’s Demand Schedule and
Demand Curve
Copyright © 2004 South-Western

4. Figure 3 Shifts in the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
Quantity of
Ice-Cream Cones
Increase
in demand
Decrease
in demand
Demand curve,D3
Demand
curve, D1
Demand
curve, D2
0

5. Table 1 Variables That Influence
Demand (Buyers)
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Slope of the Demand Curve
• Qd=a-bP slope is negative
• b=slope= -(P1-P0)/(Q0-Q1)= -DP/DQ

7. Figure 5 Ben’s Supply Schedule and Supply Curve
Copyright©2003 Southwestern/Thomson Learning
supply

8. Figure 7 Shifts in the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
Quantity of
Ice-Cream Cones
0
Increase
in supply
Decrease
in supply
Supply curve, S3
curve,
Supply
S1
Supply
curve, S2

9. Table 2 Variables That Influence Sellers
Copyright©2004 South-Western

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Qs=a+bP slope is positive
b=slope= (P1-P0)/Q1-Q0)= DP/DQ = 4-3/750-500= 0.004
Slope of the Supply Curve

11. Figure 8 The Equilibrium of Supply and Demand
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 1 2 3 4 5 6 7 8 9 10 11 12
Quantity of Ice-Cream Cones
13
Equilibrium
quantity
Equilibrium price Equilibrium
Supply
Demand
€ 2.00

12. Figure 9 Markets Not in Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0
Supply
Demand
(a) Excess Supply
Quantity
demanded
Quantity
supplied
Surplus
Quantity of
Ice-Cream
Cones
4
€ 2.50
10
2.00
7

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Equilibrium
• Surplus
• When price > equilibrium price, then quantity
supplied > quantity demanded.
• There is excess supply or a surplus.
• Suppliers will lower the price to increase sales, thereby
moving toward equilibrium.

14. Figure 10 How an Increase in Demand Affects the
Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 Quantity of
Ice-Cream Cones
Supply
Initial
equilibrium
D
D
3. . . . and a higher
quantity sold.
2. . . . resulting
in a higher
price . . .
1. Hot weather increases
the demand for ice cream . . .
2.00
7
New equilibrium
€ 2.50
10

15. Figure 11 How a Decrease in Supply Affects the Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 Quantity of
Ice-Cream Cones
Demand
New
equilibrium
Initial equilibrium
S1
S2
2. . . . resulting
in a higher
price of ice
cream . . .
1. An increase in the
price of sugar reduces
the supply of ice cream. . .
3. . . . and a lower
quantity sold.
2.00
7
€ 2.50
4

16. Table 4 What Happens to Price and Quantity When
Supply or Demand Shifts?
Graph 6:
Decrease
demand
and
decrease
supply
Graph
1 and 2
Increase
decrease
in demand
Graph
3 and 4
Increase
decrease
in supply

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first SUPPLY DECREASE and then DEMAND INCREASE
P increase Q ambiguous or not changed
P1
Demand increases; supply decreases: equilibrium price –
increases, equilibrium quantity – indeterminate

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first demand decrease and then supply
decrease
Q reduce P ambiguous or not changed
Demand decreases; supply decreases: equilibrium price –
indeterminate, equilibrium quantity – decreases

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First DEMAND INCREAS E AND then INCREASE SUPPLY
Q increase P ambiguousor not changed or reduced
Demand increases; supply increases: equilibrium price –
indeterminate, equilibrium quantity – increases

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first Demand Decrease then Supply increase
Q ambiguous price decrease
Demand decreases; supply increases: equilibrium price –
decreases, equilibrium quantity – indeterminate

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Summary
• Demand increases; supply increases: equilibrium price
– indeterminate, equilibrium quantity – increases
Demand increases; supply decreases: equilibrium price
– increases, equilibrium quantity – indeterminate
Demand decreases; supply increases: equilibrium price
– decreases, equilibrium quantity – indeterminate
Demand decreases; supply decreases: equilibrium
price – indeterminate, equilibrium quantity – decreases

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• Thank YOU
• eakalpler@gmail.com