lecture 8 - LECTURE 8: DETERMINATION OF THE MARKET PRICE...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
2010: LECTURE 8 1 LECTURE 8: DETERMINATION OF THE MARKET PRICE (Cont) Equilibrium. Mankiw: Chapter 4
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2010: LECTURE 8 2 EQUILIBRIUM What does “equilibrium” mean? System is “at rest” - no forces pushing for change.
Background image of page 2
2010: LECTURE 8 3 Equilibrium price determined by - eagerness of households to buy. - eagerness of firms to sell. We need to include both forces - demand and supply.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2010: LECTURE 8 4 Moment of putting the curves together. “In Edgeworth’s old age his face was largely concealed in his beard, and his sunken eyes were not very expressive; but at a critical moment one could gauge that his feelings were overcoming him. One such was when, after many hours of lecturing and after many passages of digression with quotations from the classics and analogies from physics, he at last made the supply curve intersect the demand curve on the blackboard. One knew it was a great moment.” “The Life of John Maynard Keynes” by Roy Harrod, p 373.
Background image of page 4
2010: LECTURE 8 5 Equilibrium price when Quantity Demanded = Quantity Supplied.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 16

lecture 8 - LECTURE 8: DETERMINATION OF THE MARKET PRICE...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online