section 2 - Aniko Oery University of California, Berkeley...

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Aniko Oery University of California, Berkeley Section 2: Supply and Demand Review Econ 100A, MICRO-ECONOMIC ANALYSIS, Spring 2010 1 Systems of equations with two unknowns Solve the following system of two equations for the two unknowns x, y and plot a graph in the ( x, y ) plane. y = 3 x + 6 y = - 6 x + 24 2 Demand and Supply The demand represents the aggregate willingness to pay of consumers and the supply represents the aggregate marginal costs of the firms in an industry. Remember that the demand is a function of the good’s own price ( p ), the prices of its substitutes ( p S ), the prices of its complements ( p C ), the income of the consumers ( I ) and personal tastes ( X ): D ( p, p S , p C , I, X ) . The supply is a function of the price of the good ( p ), technology ( T ), input prices, e.g. labor price=wage, ( w ) and other factors that were discussed in class ( X ): S ( p, T, w, X ) . Usually we graph supply and demand in the quantity-price plane by holding the other independent
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This note was uploaded on 03/18/2010 for the course ECON 100A taught by Professor Woroch during the Spring '08 term at University of California, Berkeley.

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section 2 - Aniko Oery University of California, Berkeley...

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