1.  influenced by prices, income, and tastes Individual Demand Movies Other Total Concerts (6 @ $40) $240 (20 @ $8) 160 1,600 $2,000 A limited income. The mix of food, entertainment, etc. that provides the greatest benefit. 3 Supply and Demand

2. 24681012 4 8 $20 16 Price Quantity The Demand Curve

3. 1234567 20 40 60 80 100 120 Concert Tickets (000s) Price ($) Demand Schedule Demand Curve 1,000 3,000 5,000 7,000 9,000 Qnty $100 $80 $60 $40 $20 Price

4. 1234567 20 40 60 80 100 120 Concert tickets (000s) Price ($) Change in:price Movement along the demand curve Change in:income tastes substitutes Shift of the demand curve = Change in “demand” Movement Along vs. Shift

5. Change in Demand Price of substitute  Income  Demand for a good Price of complement  Population  Expectation that price will  in the future

6. Effect of an Increase in Demand 1234567 5 10 15 20 25 30 Bushels of wheat (millions) Price ($) Supply Increase in equilibrium price Increase in equilibrium quantity

7. The Supply Curve 24681012 4 8 $20 16 Price Quantity

8. 1234567 5 10 15 20 25 30 Bushels of wheat (millions) Price ($) Change in:price Movement along the supply curve Change in:input prices technology expectations Shift of the supply curve = Change in “supply” Movement Along vs. Shift

9. Changes in Supply Technological advance Input costs  Supply of a good Number of suppliers  Expectation that price will  in the future Government subsidies 

10. 1234567 5 10 15 20 25 30 Bushels of wheat (millions) Price ($) Supply Demand Supply, Demand, and Equilibrium  when quantity demanded = quantity supplied At $20: excess supply  price will drop At $10: excess demand  price will rise

11. 24681012 4 8 $20 16 Price Quantity

12. Effect of an Increase in Supply 1234567 5 10 15 20 25 30 Bushels of wheat (millions) Price ($) Decrease in equilibrium price Increase in equilibrium quantity

13. 1234567 2 4 6 8 10 12 No. of apartments (000s) Monthly Rent ($100) Applications Apartment Rental: Increased enrollment

14. 5101520253035 0.2 0.4 0.6 0.8 1.0 1.2 Pounds of Coffee (M) Price per pound ($) Coffee: Poor weather in Brazil

15. 20406080100120140 0.5 1.0 1.5 2.0 2.5 3.0 Pounds of Poultry (M) Price per pound ($) Increasing Poultry Consumption

16. 1234567 5 10 15 20 25 30 Units of cocaine (00s) Price per unit ($) Falling Cocaine Prices