The document discusses supply and demand. It defines demand as the quantity consumers are willing and able to purchase at different prices. The law of demand states that quantity demanded increases when price decreases. Demand can shift due to factors like income, tastes, or prices of substitutes. Supply is defined as the quantity producers are willing to supply at different prices. The law of supply states that quantity supplied increases when price increases. Supply can shift due to costs of production, number of producers, or technology. Equilibrium occurs where quantity supplied equals quantity demanded. Disequilibrium results in shortages or surpluses which push prices toward the equilibrium level.
Supply Demand and Equilibrium..
Market Exchange..
Law of Supply...
Law of Demand...
Laws of supply and demand versus the “theory of supply and demand”
Laws vs. Theory of Supply and Demand..
Different types of demand..
Market Supply ..
Demand Curve..
Supply Curve..
Market Equilibrium..
Elasticity..
Own price elasticity of demand..
Supply Demand and Equilibrium..
Market Exchange..
Law of Supply...
Law of Demand...
Laws of supply and demand versus the “theory of supply and demand”
Laws vs. Theory of Supply and Demand..
Different types of demand..
Market Supply ..
Demand Curve..
Supply Curve..
Market Equilibrium..
Elasticity..
Own price elasticity of demand..
Demand and Supply Analysis (Economics) Lecture NotesFellowBuddy.com
FellowBuddy.com is an innovative platform that brings students together to share notes, exam papers, study guides, project reports and presentation for upcoming exams.
We connect Students who have an understanding of course material with Students who need help.
Benefits:-
# Students can catch up on notes they missed because of an absence.
# Underachievers can find peer developed notes that break down lecture and study material in a way that they can understand
# Students can earn better grades, save time and study effectively
Our Vision & Mission – Simplifying Students Life
Our Belief – “The great breakthrough in your life comes when you realize it, that you can learn anything you need to learn; to accomplish any goal that you have set for yourself. This means there are no limits on what you can be, have or do.”
Like Us - https://www.facebook.com/FellowBuddycom
Demand and Supply Analysis (Economics) Lecture NotesFellowBuddy.com
FellowBuddy.com is an innovative platform that brings students together to share notes, exam papers, study guides, project reports and presentation for upcoming exams.
We connect Students who have an understanding of course material with Students who need help.
Benefits:-
# Students can catch up on notes they missed because of an absence.
# Underachievers can find peer developed notes that break down lecture and study material in a way that they can understand
# Students can earn better grades, save time and study effectively
Our Vision & Mission – Simplifying Students Life
Our Belief – “The great breakthrough in your life comes when you realize it, that you can learn anything you need to learn; to accomplish any goal that you have set for yourself. This means there are no limits on what you can be, have or do.”
Like Us - https://www.facebook.com/FellowBuddycom
Supply and demand,the law of demand,the law of supply,equilibrium,shift in demand, shift in supply, Advance Business Consulting, miami, fort lauderdale, http://mba4help.com
This short revision presentation explores the distinction between individual and market demand. Market demand is the aggregation of individual demand for goods and services at a given price.
Normal laws of demand suggest that as prices increase demand decreases whilst firms attempt to supply more (with the opposite happening as prices decrease). The concept of elasticities asks the question ‘by how much does demand and supply change?’ Recent examination reports have made it clear that “price elasticity is an important topic and students should be prepared to apply it to the examination context as well as quote the formulas.” There is a lot to learn in this section – start with a good understanding of what elasticity it and how it is measured. Then consider why it matters for businesses to have a working knowledge / estimate of the coefficient of price elasticity of demand.
In Economics , demand and supply plays an important role in defining the economic structure of an economy. Homework Guru help you in your demand and suppy homework help and provide you the best economics homework help online.
48. Market Equilibrium Price S D A Equilibrium Q 1 0 P 1 Equilibrium Price Quantity
49. Market Equilibrium Equilibrium Quantity Price S D A Equilibrium Q 1 0 P 1 Quantity Equilibrium Price The equilibrium price is also known as the “market-clearing” price. At this price, both consumers and producers are satisfied.
50.
51. An Increase in Demand Quantity Price 0 P 1 Q 1 A S 1 D 1
52. An Increase in Demand Quantity Price 0 P 1 Q 1 A ( Original Market Equilibrium ) S 1 D 2 D 1
53. An Increase in Demand Quantity Price B 0 P 1 Q 1 A S 1 D 2 D 1
54. An Increase in Demand Quantity Price B Q 2 0 P 2 P 1 Q 1 A S 1 D 2 D 1
55. An Increase in Demand Quantity Price B( New Market Equilibrium ) Q 2 0 P 2 P 1 Q 1 A S 1 D 2 D 1
56.
57. An Increase in Supply Quantity Price A (original market equilibrium) Q 1 0 P 1 D 1 S 1
58. An Increase in Supply Quantity Price A Q 1 0 P 1 D 1 S 1 S 2
59. An Increase in Supply Quantity Price A Q 1 0 P 1 P 2 Q 2 B (New Market Equilibrium) D 1 S 1 S 2
60.
61.
62. Excess Demand Quantity Price S D 0 P 1 Equilibrium Price Equilibrium
63. Excess Demand Quantity Price S D A Equilibrium 0 P 1 Equilibrium Price P 0 Price below Equilibrium Price
64. Excess Demand Quantity Price S D A Equilibrium 0 P 1 Equilibrium Price P 0 Price below Equilibrium Price Q s 0
65. Excess Demand Quantity Price S D A Equilibrium 0 P 1 Equilibrium Price P 0 Price below Equilibrium Price Q s 0 Q d 0
68. Excess Supply Quantity Price D Equilibrium 0 P 1 Equilibrium Price S
69. Excess Supply Quantity Price D Equilibrium 0 P 2 Price above Equilibrium Price P 1 Equilibrium Price S
70. Excess Supply Quantity Price D Equilibrium 0 P 2 Price above Equilibrium Price P 1 Equilibrium Price S Q d 2
71. Excess Supply Quantity Price D 0 P 2 Price above Equilibrium Price P 1 Equilibrium Price S Equilibrium Q s 2 Q d 2
Editor's Notes
Most of time we are looking for Market Demand, or the sum of all the individuals quantities demanded in a market Example: Suppose you want to start a TV repair service -set up shop in neighborhood with many TVs & no repair shops -want to set up business in area where demand is greatest willingness means person’s want or desire to purchase & ability is having enough money to pay for the good (need both for demand!) example: Jack doesn’t have $34,000 to buy a specific car, has the willingness but not the money so there is NO demand
Prices of Related goods – substitutes (apples & oranges, chicken & beef) complements (cars & gas) Preferences: people are beginning to favor small gas-efficient cars so D shifts right while people are favoring other laptops other than Dell recently so their D curve shifts left Complements-Tennis rackets & tennis balls (demand moves in the opposite direction of the price) # of buyers - the more buyers the higher the D, the fewer the buyers the lower the D (higher birthrate, immigration, migration, death rate, or migration)
Elastic ex. – T-Bone steaks are elastic b/c $6 a pound compared to $3.50 a pound is going to cause a huge change in QtD (designer clothing / luxury items) Elastic curves – more horizontal Inelastic curves – more vertical Inelastic – higher or lower price on salt will not change Qtd greatly (ex. Toothpaste) Elastic - when quantity demanded is greater than percentage change in price Inelastic-when quantity demanded is less than percentage than price Unit elastic- when Qd changes by the same % as price
1. Tobacco is inelastic b/c addictive & insulin needed for diabetic no matter what
Once again, dealing with Market Supply, or sum of all the individual quantities supplied Supply example: supply of TVs is the number of sets manufacturers are likely to produce at $700, $500, $300, or any other price Supply: economists think about people’s ability & willingness to offer products for sale over a wide range of prices Supplier-offer economic product for sale
Based on idea of trying to maximize revenues, or profits as a business
Cost of inputs – in T-shirt, supply may have increased because of a decline in the cost of such inputs as cotton or ink = if price of inputs goes down, producer can produce more T-shirts at each and every price Prod. – more T-shirts can be produced in a production period = supply increases, if workers are unhappy/unmotivated, untrained supply decreases Technology- introduce new machine, chemical/industrial process can lower cost of production, so when costs are down producers are willing to produce more at each & every price in the market (supply down if technology breaks down) Subsidies – government payments to individuals, businesses, or other groups to encourage or protect a certain type of economic activity have opposite effect & supply increases (ex. Farmers historically receive subsidies to offset costs of production)
Government Regulations ex. Government mandates safety features to automobiles like emission controls, stronger bumpers, & air bags which increases production cost of car Natural Disaster/Crisis – somolian pirates slowing African shipping
Elastic – kites & candy because not much needed to increase production (therefore if prices rise they can increase output quickly) Inelastic – oil (need lots of machinery, capital, labor to increase production so it is inelastic), banana plantations Elasticity is influenced by availability of inputs, mobility of inputs, storage capacity, & time needed to adjust to price change
E price is also market-clearing price – market is cleared of all surpluses & shortages E is like the point reached on a balance scale when each side holds an object of equal mass When supply matches demand, both consumers & producers come away satisfied (even though producers would like higher prices & consumers lower prices)
At farmer’s market, no farmer goes home with leftover melons, and no consumer leaves empty handed at $5.00 a melonn
New video game or movie release = too many consumers! Shortage in real world – have a playoff high school football game that stadium seats 2,000 people but 2,500 people want to come to game (shortage) Price rises b/c buyers will offer to buy products at higher prices so they get the products, higher pices will also motivate sellers to produce more output
Surplus = clearance rack in any store Surplus in real world – high school football playoff has stadium for 2,000 seats but only 500 people attend (surplus of seats) Price falls because suppliers cannot sell all of their products & want to get rid of inventories (storing extra goods is costly) & produce less output