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Chap6 - Krugman and Wells Chapter 6 Steven J Haider EC201...

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Krugman Krugman and Wells and Wells Chapter 6 Chapter 6 Steven J. Haider EC201 Spring 2010
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EC201-6-p2 Overview Overview Chaps. 3-5 have started to lay out how competitive markets work Chap 3: shifts in S or D will cause the equilibrium price and quantity to change in a market Chap 4: competitive markets are efficient Chap 5: price and quantity controls were analyzed This chapter: how much do prices and quantities change? Depends on the slopes of S and D Depends on how much S and D shift We measure these features with elasticities Note: I cover the same material in the chapter, but take a pretty different tack… Caution: if you are uncomfortable with math, this week may look daunting. Let us help you! It isn’t that bad.
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