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THE TIME DIMENSION

Explore short-run and long-run price adjustments, demand and supply curve responses, effects of speculation, stability vs. instability, and risk management strategies in the time dimension of economics. Learn about supply and demand reactions to changes in demand and supply shifts.

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THE TIME DIMENSION

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  1. THE TIME DIMENSION • Short-run and long-run price adjustment • short- and long-run demand and supply curves • short- and long-run adjustment to a change in demand • Speculation • stabilising speculation • destabilising speculation • Uncertainty and risk • defining risk and uncertainty • reducing risks by holding stocks • futures markets

  2. Response of supply to an increase in demand P P1 a D1 Q1 O Q

  3. Response of supply to an increase in demand P P1 a D2 D1 Q1 O Q

  4. Response of supply to an increase in demand P Sshort-run b P2 P1 a D2 D1 Q1 Q2 O Q

  5. Response of supply to an increase in demand P Sshort-run Slong-run b P2 c P3 P1 a D2 D1 Q1 Q2 Q3 O Q

  6. Response of demand to an increase in supply P S1 a P1 Q1 O Q

  7. Response of demand to an increase in supply P S1 S2 a P1 Q1 O Q

  8. Response of demand to an increase in supply P S1 S2 a P1 b P2 D short-run Q1 Q2 O Q

  9. Response of demand to an increase in supply P S1 S2 a P1 c P3 b P2 Dlong-run D short-run Q3 Q1 Q2 O Q

  10. Stabilising speculation: initial price fall P S1 P1 a D1 O Q

  11. Stabilising speculation: initial price fall P S1 P1 a D1 b P2 D2 O Q

  12. Stabilising speculation: initial price fall P S2 S1 P1 a c P3 D1 b P2 D3 D2 O Q

  13. Stabilising speculation: initial price rise P S1 a P1 D1 O Q

  14. Stabilising speculation: initial price rise P S1 b P2 a P1 D2 D1 O Q

  15. Stabilising speculation: initial price rise P S1 S2 b P2 c P3 a P1 D2 D3 D1 O Q

  16. Destabilising speculation: initial price fall P S1 a P1 D1 O Q

  17. Destabilising speculation: initial price fall P S1 a P1 P2 b D1 D2 O Q

  18. Destabilising speculation: initial price fall P S1 S2 a P1 P2 b c P3 D1 D2 D3 O Q

  19. Destabilising speculation: initial price rise P S1 a P1 D1 O Q

  20. Destabilising speculation: initial price rise P S1 b P2 a P1 D2 D1 O Q

  21. Destabilising speculation: initial price rise P S2 S1 c P3 b P2 a P1 D3 D2 D1 O Q

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