12 Monday, September 25, 2006

12 Monday, September 25, 2006 - P S1 Suppose Expected...

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Monday, September 25, 2006 Microeconomics P Determinants of Supply S 1. Price of the product = change results in change in quantity supplied 2. Price of the inputs used in production 3. Technology used in the Production Process 4. Expectations about the future 5. # of sellers in market Change here results in change in supply Q 1. PRICE OF THE PRODUCTS P Suppose a decrease in price S If Price , quantity supplied P1 If Price , quantity supplied P2 Q2 Q1 Q 2. PRICE OF THE INPUTS USED IN PRODUCTION P S1 Suppose an input price increases S If Price input , supply P0 If Price input , supply Q1 Q0 Q
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Monday, September 25, 2006 3. TECHNOLOGY USED IN THE PRODUCTION PROCESS P Suppose an increase in technology S If Technology , supply P0 S1 If Technology , supply ) doesn’t happen Q0 Q1 Q 4. EXPECTATION ABOUT THE FUTURE
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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.

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12 Monday, September 25, 2006 - P S1 Suppose Expected...

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