Lecture Slides 9 - Overview Lecture 9 Last class Supply...

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Overview ( Lecture # 9) Last class: Supply curve Today: Assignment 2 Review of demand & supply curve shift Equilibrium 11/30/16 1 Econ 130_ Fall 2016 _ C Dhakal
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Key elements in supply & demand model The demand curve The supply curve Set of factors that shifts each curves. Put these elements together to find the actual price of goods and the quantity of goods. Equilibrium price and equilibrium quantity!! 11/30/16 Econ 130_ Fall 2016 _ C Dhakal 2
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Equilibrium Equilibrium : ‘An economic situation is in equilibrium when no individual would be better off doing something different’ (Krugman and Wells Market Equilibrium : where demand and supply intersect! A situation in which quantity supplied exactly equals the quantity demanded at a given price. ( example) 11/30/16 Econ 130_ Fall 2016 _ C Dhakal 3
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11/30/16 Econ 130_ Fall 2016 _ C Dhakal 4 Price (per Pound) Quantity Demanded ( billions of pounds) Quantity Supplied ( billions of pounds) 3.5 0.5 3.5 3 1 3 2.5 1.5 2.5 2 2 2 1.5 2.5 1.5 1 3 1 0.5 3.5 0.5 Draw demand and supply curve .
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Equilibrium cont..
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