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Unformatted text preview: P S1 Suppose Expected future price goes up S If expected future price , supply P0 If expected future price , supply Q1 Q0 Q 5. # OF SELLERS IN MARKET P Suppose # of sellers increases S If # of sellers , supply P0 S1 If # of sellers , supply Q0 Q1 Q Monday, September 25, 2006 SUPPLY AND DEMAND P S P* = market equilibrium price Q* = market equilibrium quantity P* Market Equilibrium D Q* Q MARKET EQUILIBRIUM 1. At market equilibrium = quality demanded equals quantity supplied implies that produces are producing exactly the amount that buyers want to buy. 2. There is not tendency for further change no reason for prices to move any from p* and no reason for quantity to move away from Q*...
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This note was uploaded on 03/20/2008 for the course EC 201 taught by Professor Xasdf during the Fall '08 term at N.C. State.
- Fall '08