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Supply & Demand

Quick overview ( 5 min.)

katharina priew

on 18 February 2013

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Transcript of Supply & Demand

Supply & Demand Law of Demand Law of Supply the higher the price, the less the demand Microeconomics
Law of Demand + Law of Supply the higher the price of a good, the higher the supply Equilibrium Disequilibrium P1= 30€
Q2(s)= 30 vc
5€ +4€ fc +1€ p Chair Manufacturing 5+4+1 = 10€ Excess Demand Excess Supply fc +4€ 5€ +21€ 5+4+21 = 30€ vc p Movements vs Shifts Chair Manufacturing S D D S P1= 10€
Q2(d)= 30 D S -Price -Change in income
-Seasonal factor/ trends
-Population factor
-Price of related good Demand Supply -Price P D S 10€ 30 10
20€ 20 20
30€ 10 30 D D D S S S Surplus Consumer Surplus P CS
Anton 10€ -
Billy 20€ -
Claire 30€ 10€ Producer Surplus P PS
Aldi 10€ 10€
Budni 20€ -
Costco 30€ - -Input factor
-Number of competitors Change along the curve
Relation stays the same New curve parallel to initial
Change in Relation Market price: 20€ Market price: 20€ Tasks The higher the price the lower the demand. A price set above the equilibrium
leads to excess supply. Till is thirsty and is willing to pay $2 for a liter of water. He goes into a store and buys half a liter of water for $0.50. He made a CS of . $0.50 What happens to the curve?: The patties for burgers get more expensive. Movement Shift Shift Movement Repetition
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