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microbook_3e-page38 - Parents bid up the price of the...

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Market Supply Sum of all individual supply curves (sum of all individual quantities supplied at each price) quantity supplied by: price A B C market supply $4 30 + 10 + 25 = 65 $2 10 + 5 + 10 = 25 Market Equilibrium Excess Demand x The absolutely must-have Christmas present x
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Unformatted text preview: Parents bid up the price of the present, some parents drop out of the market x Factories increase production and ask higher price x Shortage eliminated – “price rationing” At equilibrium there is no natural tendency for further adjustment. Page 38...
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