Demand and supply analysis

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Presentation transcript:

Demand and supply analysis Market equilibrium

Equilibrium price and output: The Market Demand and Supply of Potatoes (Monthly)

The determination of market equilibrium (potatoes: monthly) Supply D d C c Price (cents per kg) b B a A Demand Quantity (tonnes: 000s)

The determination of market equilibrium (potatoes: monthly) Supply D SURPLUS (330 000) d C c Price (cents per kg) b B a A Demand Quantity (tonnes: 000s)

The determination of market equilibrium (potatoes: monthly) Supply D d C c Price (cents per kg) b SHORTAGE (300 000) B a A Demand Quantity (tonnes: 000s)

The determination of market equilibrium (potatoes: monthly) Supply D d Price (cents per kg) b B a A Demand Qe Quantity (tonnes: 000s)

Demand and supply analysis Effect of shift in the demand curve

Effect of a shift in the demand curve P S An increase in demand g Pe1 D1 O Qe1 Q

Effect of a shift in the demand curve P S g Pe1 D1 O Qe1 Q

Effect of a shift in the demand curve P S g Pe1 D2 D1 O Qe1 Q

Effect of a shift in the demand curve P S i Pe2 g h Pe1 D2 D1 O Qe1 Qe2 Q

Effect of a shift in the demand curve P S A decrease in demand D2 g Pe1 D1 O Qe1 Q

Effect of a shift in the demand curve P S m g Pe1 n Pe2 D2 D1 O Qe2 Qe1 Q

Demand and supply analysis Effect of shift in the supply curve

Effect of a shift in the supply curve A decrease in supply g Pe1 D O Qe1 Q

Effect of a shift in the supply curve g Pe1 D O Qe1 Q

Effect of a shift in the supply curve g Pe1 D O Qe1 Q

Effect of a shift in the supply curve k Pe3 j g Pe1 D O Qe3 Qe1 Q

Effect of a shift in the supply curve An increase in supply g Pe1 D O Qe1 Q

Effect of a shift in the supply curve g p Pe1 q Pe2 D O Qe1 Qe2 Q