Chapter 6 Combining Supply and Demand. Equilibrium- where the supply and demand curves cross. Equilibrium determines the price and the quantity to be.

Slides:

Advertisements

Similar presentations

Market Equilibrium Market equilibrium is the condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is no.

Advertisements

Demand and supply analysis

LECTURE #5: MICROECONOMICS CHAPTER 6 Government Intervention Policy Objectives Policy Tools.

MARKET EQUILIBRIUM. What is it?  When the supply of a product is equal to the demand of a product at a certain price.  This means that there is no excess.

How does the price of an item affect the demand?

Chapter 3. Supply and Demand Link to syllabus Skip discussions of substitutes and complements (p. 71), and of normal and inferior goods (p. 72).

Demand. Quantity of a product that buyers are willing and able to purchase at any and all prices Consumers are interested in receiving the most satisfaction.

Demand and Supply: Basics September 9, Demand  In a market economy, the price of a good is determined by the interaction of demand and supply.

MARKET EQUILIBRIUM Quantity Price Quantity Price.

3 DEMAND AND SUPPLY. © 2012 Pearson Addison-Wesley Equilibrium is a situation in which opposing forces balance each other. Equilibrium in a market occurs.

Chapter Five: Welfare Analysis. Consumer Surplus.

Microeconomics: Law of Supply & Demand

ECONOMICS 211 CLICKER QUESTIONS Chapter 4 – Question Set #3.

Chapter 4 Demand and Supply. The Market can be a location, network of buyers and sellers for a product, demand for a product or a price-determination.

3 - 1 Copyright McGraw-Hill/Irwin, 2002 Markets Demand Defined Demand Graphed Changes in Demand Supply Defined Supply Graphed Changes in Supply Equilibrium.

02 Supply and demand Acknowledgement: John Kane SUNY.

5.1 – An Economic Application: Consumer Surplus and Producer Surplus.

Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Chapter 2 Basic.

Chapter 3: Competitive Dynamics How Competitive Markets Operate Market Equilibrium:  The stable point at which demand and supply curves intersect PRICE.

Module Supply and Demand: Supply and Equilibrium

 where the supply and demand curves meet  equilibrium price: P where Q D = Q S  equilibrium quantity: Q where Q D = Q S.

Increases and Decreases in Supply and Demand Mr. Raposo Monday, October 5, 2009.

Chapter 6 notes – all sections

Demand for and Supply of Greebes PRICE $ per Greebe QUANTITY DEMANDED (millions of Greebes) QUANTITY SUPPLIED (millions of Greebes) $

EQUILIBRIUM. IN YOUR NOTEBOOK If you have higher supply than demand, what is it called? If you have higher demand than supply, what is it called?

 As the price of a good or service that producers are willing and able to offer for sale during a certain period of time rises (or falls), the quantity.

Unit 3: Supply and Demand Chapter 6: Prices. Supply and Demand Meet Equilibrium – the POINT where demand and supply come together Here the market is stable.

Chapter 6.  Why does the market tend towards equilibrium?  Excess demand leads firms to raise prices, higher prices induce the quantity supplied to.

Chapter 6 Sections 1 & 2.  Market Equilibrium ◦ At a certain price, quantity demanded and quantity supplied are equal  Equilibrium Price ◦ Price at.

Macroeconomics CHAPTER 3 Supply and Demand PowerPoint® Slides by Can Erbil © 2004 Worth Publishers, all rights reserved.

Chapter 4: The Market Forces of Supply and Demand 1.

Chapter Three: Supply and Demand. The Theory of Supply.

SUPPLY AND DEMAND CHART Supply Curve: Slopes upward to the right Why? Producers will produce more if the price is high- it will increase revenue Called.

Changes in Equilibrium Lesson 2.7. Changes in Supply and Demand Law of Demand and Law of Supply describe what happens when prices change When price changes,

Demand Defined Demand Graphed Changes in Demand Supply Defined Supply Graphed Changes in Supply Equilibrium Surpluses Shortages Individual Markets: Demand.

Chapter 6 Section 2.  Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity demanded will fall; until both are equal  Surplus –

Law of Supply and the Supply Curve Chapter 7 Section 3.

DEMAND, SUPPLY, and MARKET EQUILIBRIUM Appendix (chapter 3)

Supply and Demand. The Law of Demand The law of demand holds that other things equal, as the price of a good or service rises, its quantity demanded falls.

SUPPLY & DEMAND. Demand  Demand is the combination of desire, willingness and ability to buy a product. It is how much consumers are willing to purchase.

ENVR 210 CLICKER QUESTIONS Chapter 4 – Question Set #3.

Supply. Quantity Supplied Amount of any good or service that sellers are willing and able to sell Law of Supply: Other things equal (ceteris paribus),

MARKET EQUILIBRIUM.   Market Equilibrium is when the quantity demanded and the quantity supplied at a particular price are EQUAL.   Equilibrium Price.

Equilibrium Price  A. In the real world, demand and supply work together.  B. The price at which the supply meets the demand—where the two curves intersect—is.

Demand A Schedule Showing the Consumers are Willing and Able to Purchase At a Specified Set of Prices During A Specified Period of Time Amounts of a Good.

Main Definitions Market: –All situations that link potential buyers and potential sellers are markets. Demand: –A demand schedule shows price and quantity.

Supply and Demand Prices in a Free Market System.

Module Supply and Demand: Supply and Equilibrium KRUGMAN'S MACROECONOMICS for AP* 6 Margaret Ray and David Anderson.

Demand Amount of goods or services a person is willing and able to buy Must not only want the good, but also be able to pay for it The law of demand states.

Unit 3: Supply and Demand

Shifting Supply and Demand

LESSON 6.2 Shifts of Demand and Supply Curves

The Impact on Price or Quantity will be uncertain

Chapter Four: Supply and Demand.

Supply and Demand.

MARKET EQUILIBRIUM.

Section 2 Module 7.

The Impact on Price or Quantity will be uncertain

Chapter 6 Prices Bring Markets to Balance

SUPPLY & DEMAND.

2.3 How Competitive Markets Operate

Chapter 3 Supply and Demand © OnlineTexts.com p. 1.

Chapter Three: Supply and Demand.

EQUATION 2.1 Demand Function.

Chapter 8 Review.

Market Equilibrium – Consumer and Producer Surplus Graphically, we can identify the areas representing consumer and producer surplus, which.

Warm Up Explain the law of supply.

MARKET EQUILIBRIUM.

Equilibrium of Supply & Demand

Increases and Decreases in Supply and Demand

Presentation transcript:

Chapter 6 Combining Supply and Demand

Equilibrium- where the supply and demand curves cross. Equilibrium determines the price and the quantity to be made and consumed of a good/service. A price which is higher than the market equilibrium price will cause a surplus. A price below equilibrium will cause a shortage.

A supply shift to the right causes the equilibrium price to fall and the equilibrium quantity to increase. A supply shift to the left causes the equilibrium price to rise and the equilibrium quantity to decrease.

A shift in demand to the left causes equilibrium price to fall and equilibrium quantity to decrease. A shift in demand to the right causes equilibrium price to rise and equilibrium quantity to increase.