CH3 - Supply: • Tells us something about how much firms...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 3 Outline What is a market? A collection of buyers and sellers Buyers DEMAND goods and services Sellers SUPPLY goods and services Supply and demand is an ECONOMIC MODEL that helps explain how the price of a good is determined in a competitive market. What is a competitive market? Demand: Tells us something about how much people are willing to buy (quantity demanded) at different prices, all else the same. Demand can be defined using a table, a graph, or simple algebra. Graphically we distinguish between a movement along the curve and a shift of the curve. What factors SHIFT the demand curve? Example: the demand for apartments
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Supply: • Tells us something about how much firms are willing to sell (quantity supplied) at different prices, all else the same. • Supply can be defined using a table, a graph, or simple algebra. • Graphically we distinguish between a movement along the curve and a shift of the curve. • What factors SHIFT the supply curve? • Example: the supply of recycled cans Market equilibrium: • In a competitive market, price adjusts until quantity supplied equals quantity demanded. • What happens either the demand curve or the supply curve shifts? • What happens when both curves shift at the same time?...
View Full Document

This note was uploaded on 09/16/2011 for the course ECO 2023 taught by Professor Underwood-caputo during the Spring '08 term at University of Central Florida.

Ask a homework question - tutors are online