LecE2Monday

LecE2Monday - Clicker Check Question: Have you taken a...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

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

Unformatted text preview: Clicker Check Question: Have you taken a calculus course? c. .. a ... y e co m in g m pl et ed fir st tn ta k sc ho ol bu N ev o. .. er . 0% 0% 0% 0% h 1. Never. 2. In high school but not college. 3. I am taking my first calculus course this term. 4. I have completed a college calculus course. The demand curve is given by P=100-Q and the supply curve by P=20+4Q. The competitive equilibrium Quantity is 1. 2. 3. 4. 5. Q=80 Q=44 Q=28 Q=20 Q=16 Solving for Equilibrium Quantity • • • • Demand Curve P=100-Q Supply Curve P=20+4Q Two equations in two unknowns. Supply curve crosses demand curve where 100-Q=20+4Q. This happens where 80=5Q or Q=16 The demand curve is given by P=100-Q and the supply curve by P=20+4Q. The competitive equilibrium Price is 1. 2. 3. 4. 5. P=84 P=80 P=64 P=24 P=20 0% 0% 0% 0% 0% Solve for Equilibrium Price • We found that Q=16. • We know from demand equation that P=100-Q. • So P=84 And on to our main lecture… The price of a good rises and so does the quantity sold. These observations are consistent with: 1. An upward shift of the supply curve. 2. A downward shift of the supply curve. 3. An upward shift of the demand curve. 4. A downward shift of the demand curve. ft .. sh ift o ift sh rd ar d of t.. f. .. ift o sh ar d rd sh ift of t.. 0% 0% 0% 0% Price With upward sloping supply, if Demand Curve shifts up, Price and Quantity both rise. Demand curve shifts up New Equilibrium Old Equilibrium Quantity If the supply curve shifts upwards, we expect r i. .. .. tit y bo e fa l ls , qu an qu an tit y Pr ic Pr ic e an d ua nt ity es ,q ris e Pr ic e an d qu an tit y bo t.. . fa ... 0% 0% 0% 0% Pr ic 1. Price and quantity both rise. 2. Price rises, quantity falls. 3. Price and quantity both fall. 4. Price falls, quantity rises. Here is the picture. Price Supply curve shifts up. New equilibrium Old equilibrium Quantity And now back to our lecture… ...
View Full Document

Page1 / 11

LecE2Monday - Clicker Check Question: Have you taken a...

This preview shows document pages 1 - 11. Sign up to view the full document.

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