Fitch%20-%20Class2%20F10%20-%20%20Supply%20and%20Demand

Fitch%20-%20Class2%20F10%20-%20%20Supply%20and%20Demand -...

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Fall 2010 UGBA101A-03 Microeconomic Analysis for Business Decisions Slide 1 Class 2 Prof. Todd Fitch
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Chapter 2: Demand and Supply Agenda uni25CF What is behind the supply and demand curves? uni25CF We will leave the details for future classes and focus on some intuitions uni25CF How prices change in a market and why? Chapter 2 Supply and Demand Slide 2 uni25CF Movements along the curve and movements (shifts) of the curve uni25CF Try to apply the new tools to learn something about how fear after 9/11 impacted economic variables.
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The Basics of Supply and Demand Understanding and predicting how changing world economic conditions affect market price and production Evaluating the impact of government price controls, minimum wages, price supports, and production incentives Supply-demand analysis is a fundamental and powerful tool that can be applied to a wide variety of interesting and important problems. To name a few: Chapter 2 Supply and Demand Slide 3 Determining how taxes, subsidies, tariffs, and import quotas affect consumers and producers Let’s think about the market for office space in New York before 9/11
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SUPPLY AND DEMAND 2.1 The Supply Curve supply curve Relationship between the quantity of a good that producers are willing to sell and the price of the good. The supply curve shows how the quantity of a good offered for sale changes as the price of the good changes. The supply curve is upward sloping: The higher the price, the more firms are able Chapter 2 Supply and Demand Slide 4 and willing to produce and sell.
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SUPPLY AND DEMAND 2.1 The Supply Curve The supply curve is thus a relationship between the quantity supplied and the price. We can write this relationship as an equation: Q S = Q S ( P ) Other Variables That Affect Supply Production costs, including wages, interest charges, and the costs of raw materials.
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