Managerial Economics-Charles W. Upton Valentine’s Day

The Demand for Chocolate Candy P D Q

Valentine’s Day The Demand for Chocolate Candy P D Q QoQo PoPo

Valentine’s Day The Supply and Demand for Chocolate Candy P D Q Q1Q1 P1P1 S

Valentine’s Day The Supply and Demand for Chocolate Candy P D Q Q1Q1 P1P1 S D*

Valentine’s Day The Supply and Demand for Chocolate Candy P D Q Q1Q1 P1P1 S D* Q2Q2 P2P2

Valentine’s Day The Supply and Demand for Roses P P1P1 Q1Q1 D Q S

Valentine’s Day The Supply and Demand for Roses P P1P1 Q1Q1 D Q S D*

Valentine’s Day The Supply and Demand for Roses P P1P1 Q1Q1 D Q S D* P2P2 Q2Q2

Valentine’s Day There is a difference Both chocolate and roses cost more on Valentine’s Day

Valentine’s Day There is a difference Both chocolate and roses cost more on Valentine’s Day –Roses cost a lot more –Chocolate costs a little more

Valentine’s Day Why the Difference P Q D Candy P Q D Roses

Valentine’s Day Why the Difference P Q D Candy P Q D Roses D*

Valentine’s Day Why the Difference P Q D Candy P Q D Roses D* S S

Valentine’s Day Why the Difference P Q D Candy P Q D Roses D* S S Because candy is storable and roses are not, the supply functions have different slopes

Valentine’s Day Why the Difference P Q D Candy P Q D Roses D* S S PP PP

Valentine’s Day Lessons learned Simple supply and demand functions allow us to analyze this and many other problems in economics.

Valentine’s Day Lessons learned Simple supply and demand functions allow us to analyze this problem, as they do many problems in economics. The more we can tell something about the shape of supply and demand curves, the more we can say about the impacts of supply and demand shifts

Valentine’s Day End ©2003 Charles W. Upton