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Business Administration & Management

Business Administration & Management. Mr. Bernstein Notes, pp 67-69 Price Setting and Competition March 7, 2014. Business Administration & Management Mr. Bernstein. Supply and Demand Demand = # of units that will be purchased at a given price

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Business Administration & Management

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  1. Business Administration & Management Mr. Bernstein Notes, pp 67-69 Price Setting and Competition March 7, 2014

  2. Business Administration & ManagementMr. Bernstein Supply and Demand Demand = # of units that will be purchased at a given price Supply = # of units that will be offered for sale at a given price In general, prices changes drive changes in supply and demand

  3. Business Administration & ManagementMr. Bernstein Supply Supply shock = sudden change in supply not driven by change in price. Example: Oil Example: Opening of a new store in same target area

  4. Business Administration & ManagementMr. Bernstein Demand Demand changes can also be driven by factors other than price Example: Natural disaster Example: Influx of new residents

  5. Business Administration & ManagementMr. Bernstein Equilibrium Price In a competitive market, prices will be the point where supply equals demand

  6. Business Administration & ManagementMr. Bernstein Competition Leads To: Improved Product Quality Product Innovation Lower Prices to Consumers Efficient Allocation of Resources

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