ECON_2306 => Lecture 3 Slides

200 supply s e l l e r s 1 1 01 1 1

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Unformatted text preview: PLY BUSHELS OF CORN MARKET MARKET DEMAND & SUPPLY Price of Corn CORN MARKET $ !" # * ) ' %& '( )( *" "" +( MARKET BUSHELS OF CORN P $5 4 ! 200 DEMAND B U Y E R S $ %/ !" # * ) ' ,( "( *" )( " MARKET S CORN MARKET )1((( #1((( 01((( ''1((( ',1((( ! 200 SUPPLY S E L L E R S ')1((( '(1((( 01((( #1((( '1((( $ %& !" )1((( # #1((( * 01((( ) ''1((( ' ',1((( $% 3 Market / !" ')1((( Clearing # '(1((( Equilibrium 2 1 * 01((( ) #1((( ' '1((( D 2 4 6 EQUILIBRIUM Principles of Microeconomics o 65 78 10 12 14 16 Corn Q 66 Quantity of Principles of Microeconomics MARKET MARKET DEMAND & SUPPLY Price of Corn CORN MARKET P MARKET MARKET DEMAND & SUPPLY Price of Corn CORN MARKET $5 4 $ %& !" )1((( # #1((( * 01((( ) ''1((( ' ',1((( Surplus S At a $4 price more is being CORN MARKET P $5 4 S At a $2 price more is being CORN MARKET $% / ')1((( '(1((( 01((( #1((( '1((( 3 2 1 !" supplied than # li th demanded * ) ' D 2 4 6 $ %& !" )1((( # #1((( * 01((( ) ''1((( ' ',1((( $% / ')1((( '(1((( 01((( #1((( '1((( 3 2 1 !" # demanded than * supplied ) ' Shortage D 2 4 6 o 78 10 12 14 16 Q 67 o 78 101112 14 16 Q 68 Quantity of Principles of Microeconomics Corn Quantity of Principles of Microeconomics Corn 17 MARKET MARKET DEMAND & SUPPLY Price of Corn CORN MARKET P Market Market Equilibrium: Putting Demand and Supply Supply Together Market Equilibrium $5 4 $ %& !" )1((( # #1((( * 01((( ) ''1((( ' ',1((( Surplus S CORN MARKET $% !" # * ) ' D Q 69 3 2 1 Shortage 2 4 6 / ')1((( '(1((( 01((( #1((( '1((( Market equilibrium A situation where quantity demanded equals quantity supplied. Competitive market equilibrium A market equilibrium with many buyers and many sellers. o 78 101112 14 16 Corn Quantity of Principles of Microeconomics 70 Principles of Microeconomics Market Market Equilibrium: Putting Demand and Supply Supply Together How Markets Eliminate Surpluses and Shortages Surplus A situation in which the quantity supplied is greater than the quantity demanded. Shortage A situation in which the quantity demanded is greater than the quantity supplied. The Effect of Surpluses and Shortages on the Market Price The The Effect of Demand and Supply Shifts on Equilibrium Equilibrium The Effect of Shifts in Supply on Equilibrium The Effect of a Decrease in Supply on Equilibrium 71 Principles of Microeconomics Principles of Microeconomics 72 18 The The Effect of Demand and Supply Shifts on Equilibrium Equilibrium The Effect of Shifts in Demand on Equilibrium The Effect of an Increase in Demand on Equilibrium The The Effect of Demand and Supply Shifts on Equilibrium Equilibrium The Effect of Shifts in Demand and Supply over Time Shifts in Demand and Supply over Time 73 Principles of Microeconomics Principles of Microeconomics 74 The The Effect of Demand and Supply Shifts on Equilibrium Equilibrium The Effect of Shifts in Demand and Supply over Time The Demand for Chicken Has Increased More Than the Supply Sources McConnell and Stanley Brue, Microeconomics, 16th edition, 2006. R. Glenn Hubbard and Anthony P. O'Brien, Microeconomics,1st edition 2006. 75 Principles of Microeconomics Principles of Microeconomics 76 19...
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