1. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Chapter 2 Basic Price Analysis: Supply and Demand

2. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.1. The marginal opportunity cost of production increases with the number of units produced

3. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.2. If firms are price takers, they will produce where price equals the marginal opportunity cost of production

4. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.3. Shifts in Supply

5. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.4. Marginal Consumer Value

6. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.5. Consumers purchase a number of units where price equals the marginal value curve

7. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.6. Shifts in Demand

8. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.7. The price and quantity in perfect competition is where supply and demand cross.

9. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.8. A price lower than the equilibrium price leads to an excess demand. Excess demand leads to higher prices.

10. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.9. A price higher than the equilibrium price leads to an excess supply. Excess supply leads to lower prices.

11. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.10. Consumer, Producer, and Total Surplus Under Perfect Competition

12. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.11. Equilibrium Price and Quantity Changes

13. Norwood and Lusk: Agricultural Marketing & Price Analysis © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Figure 2.12. Simultaneous Shifts in Supply and Demand