1 / 18

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand. Chapter 4. Competitive Market. Lots of informed buyers and sellers dealing in identical goods. Figure 1 Catherine’s Demand Schedule and Demand Curve. Figure 2 Market Demand as the Sum of Individual Demands. Figure 3 Shifts in the Demand Curve.

psyche
Download Presentation

The Market Forces of Supply and Demand

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. The Market Forces of Supply and Demand Chapter 4

  2. Competitive Market Lots of informed buyers and sellers dealing in identical goods.

  3. Figure 1 Catherine’s Demand Schedule and Demand Curve

  4. Figure 2 Market Demand as the Sum of Individual Demands

  5. Figure 3 Shifts in the Demand Curve

  6. Shift Factors for Demand • Income. • Prices of related goods (substitutes and complements). • Tastes. • Expectations. • Number of buyers.

  7. Figure 4 Shifts in the Demand Curve versus Movements along the Demand Curve

  8. Figure 6 Market Supply as the Sum of Individual Supplies

  9. Figure 6 Market Supply as the Sum of Individual Supplies

  10. Figure 7 Shifts in the Supply Curve

  11. Shift Factors for Supply • Input prices. • Technology. • Expectations. • Number of sellers.

  12. Figure 8 The Equilibrium of Supply and Demand

  13. Figure 9 Markets Not in Equilibrium

  14. A Three-Step Program for Analyzing Changes in Equilibrium • Decide whether the event shifts the supply or demand curve (or perhaps both). • Decide in which direction the curve shifts. • Use the supply-and-demand to see how the shift changes the equilibrium price and quantity.

  15. Figure 10 How an Increase in Demand Affects the Equilibrium

  16. Figure 11 How a Decrease in Supply Affects the Equilibrium

  17. Figure 12 A Shift in Both Supply and Demand

  18. In-class Exercise With a separate supply and demand diagrams, show the effect on equilibrium price and quantity in the blueberry market of the following events. Provide a brief explanation for every curve shift. • Scientific research conclusively proves that blueberries reverse age related memory loss. • A new form of irrigation improves the productivity of blueberry farms. • Starbucks mounts a successful advertising campaign for its blueberry smoothies. • Incomes in the United States increase. • A blueberry bush disease spreads throughout the Northeast.

More Related