ln8_buyers - Lecture 8: Buyers and Sellers Put demand and...

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1 Lecture 8: Buyers and Sellers Put demand and supply together to get " equilibrium price " - price at which the quantity of the product or service (often called a "good") desired to be purchased by buyers exactly equals the quantity of the product or service desired to be produced and sold by sellers. The corresponding quantity is called the "equilibrium quantity". The equilibrium price and equilibrium quantity together is called the market equilibrium. 0 20 40 60 80 100 120 7 10 13 15 17 millions of barrels Price per barrel ($) demand supply 1 In the figure above, at a price per barrel of $20, sellers want to produce and sell 13 million barrels, and at that same price, buyers want to purchase 13 million barrels. The equilibrium price is $20 and the equilibrium quantity is 13 million barrels (point 1). If the price was higher, say at $80 per barrel, sellers would want to produce and sell 17 million barrels, but buyers would only purchase 7 million barrels, so there would be a " surplus
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This note was uploaded on 10/12/2008 for the course HIST 203 taught by Professor James during the Spring '08 term at N.C. State.

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ln8_buyers - Lecture 8: Buyers and Sellers Put demand and...

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