1 / 16

CHAPTER 5 MARKET EQUILIBRIUM ANALYSIS 2 nd Semester, S.Y 2013 – 2014

CHAPTER 5 MARKET EQUILIBRIUM ANALYSIS 2 nd Semester, S.Y 2013 – 2014. Market Equilibrium. Market Equilibrium is a situation in which the quantity demanded of a good or service at a particular price is equal to the quantity supplied at that price. Price as a Regulator.

hayes
Download Presentation

CHAPTER 5 MARKET EQUILIBRIUM ANALYSIS 2 nd Semester, S.Y 2013 – 2014

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CHAPTER 5 MARKET EQUILIBRIUM ANALYSIS 2nd Semester, S.Y 2013 – 2014

  2. Market Equilibrium Market Equilibrium isa situation in which the quantity demanded of a good or service at a particular price is equal to the quantity supplied at that price.

  3. Price as a Regulator The price of a good regulates the quantities demanded and supplied. If the price is too high, the quantity supplied exceeds the quantity demanded. If the price is too low, the quantity demanded exceeds the quantity supplied. There is one price at which the quantity demanded equals the quantity supplied.

  4. Equilibrium Price and Quantity Equilibrium price is the price at which the quantity of a product demanded by consumers the quantity supplied by producers are equal. The quantity bought and sold at that price is the equilibrium quantity. The equilibrium price is also known as the market-clearing price: it is the price that “clears the market” by ensuring that every buyer willing to pay that price finds a seller willing to sell at that price, and vice versa.

  5. Surplus, Shortage, and Equilibrium The market may experience a surplus (excess supply), which is the result of quantity supplied being greater than quantity demanded, usually because prices are too high. Or a shortage (excess demand) may occur, the result of quantity demanded being greater than quantity supplied, usually because prices are too low.

  6. Excess supply A E C Excess demand The Graphical Interaction of Supply and Demand 500 S 400 Price 350 300 250 200 150 D 100 1 2 3 4 5 6 7 8 9 10 11 12 Quantity

  7. Market Analysis for T-shirts

  8. Change in Demand and Equilibrium Price Increase in Demand

  9. Change in Demand and Equilibrium Price Decrease in Demand

  10. Change in Supply and Equilibrium Price Increase in Supply

  11. Change in Supply and Equilibrium Price Decrease in Supply

  12. Change in Supply and Demand and Equilibrium Price Equilibrium price falls when there is a decrease in demand or an increase in supply. Equilibrium price rises when there is an increase in demand or a decrease in supply. In other words, when consumers want less or producers supply more, prices will fall. When consumers want more or producers supply less, prices will rise.

  13. Increase in both Demand and Supply

  14. Decrease in Demand and Increase in Supply

  15. Increase in Demand and Decrease in Supply

  16. Decrease in both Demand and Supply

More Related