lecture 6 - LECTURE 6 DETERMINATION OF THE MARKET PRICE In...

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2010: LECTURE 6 1 LECTURE 6: DETERMINATION OF THE MARKET PRICE In trade discussion - price lies between opportunity cost of seller and buyer. Now go deeper. Mankiw: Chapter 4
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2010: LECTURE 6 2
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2010: LECTURE 6 3 Price is determined jointly by - eagerness of households wanting to buy - demand side. - eagerness of firms wanting to sell - supply side.
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2010: LECTURE 6 4 Competitive markets - price-taking behavior Demand side: Individual demand curve Market demand curve
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