gs_-10_--_D_-_Supply_and_demand_--_Applications_--_5

gs_-10_--_D_-_Supply_and_demand_--_Applications_--_5 -...

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1 ANNOUNCEMENTS (#1): ± Tests will be held at 7:30 am to 9:00 am , during normal lecture days on Wednesdays. Rooms will be announced later. ± Look for the coverage of specific exams from the Course Syllabus. ± SCHEDULE OF EXAMS (Tentative): o TEST #1 – Dec. 16 (Wednesday) o TEST #2 – last week January, 2008 (tentative -- TBA) o TEST #3 – last week February, 2008 (TBA) o FINAL EXAM – Announced during FINAL EXAM WEEK Dec. 11, 2009 Lecture #10 2 TEN YEAR GRAPH OF THE U.S. DOW JONES STOCK MARKET INDUSTRIAL INDEX – UNTIL YESTERDAY, DEC. 9, 2009 LECTURE #10: APPLICATIONS OF SUPPLY & DEMAND ± EXAMPLE #8: STABILIZATION OF PRICES OF BASIC GOODS
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2 EXAMPLE #8: PRICE STABILIZATION OF BASIC COMMODITIES (for instance, Rice) A MAJOR EXAMPLE OF THE INTERACTION OF “MARKETS AND THE STATE” Dec. 11, 2009 Lecture #10 5 The prices of basic commodities can be stabilized. This means not allowing the price to fluctuate beyond a reasonable limit. Dec. 11, 2009 Lecture #10 6 MARKET SUPPLY AND DEMAND WITH WAREHOUSING SUPPLY MANAGEMENT ± The price of the staple could rise or fall during the seasons of the year. o Planting season : supply can get depleted; the price rises. o Harvest time : supply can rise; the price falls.
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3 Dec. 11, 2009 Lecture #10 7 MARKET SUPPLY AND DEMAND WITH WAREHOUSING SUPPLY MANAGEMENT ± Buffer stock management means removing or replenishing the market with supply o Planting season : Release supply to the market to replenish falling supply.
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gs_-10_--_D_-_Supply_and_demand_--_Applications_--_5 -...

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