Ch03Spring2011

Compact disks p 64 64 figure 34 nonprice determinants

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Unformatted text preview: entire supply schedule to Cause move to the right or to the left Number of sellers (+) Technology: (+) Resource prices: (-) Taxes and subsidies Taxes Taxes (-) Subsidies (+) Future price expectations (-) Future Prices of related goods in production (-) 18 18 MOVEMENT ALONG VS. A SHIFT OF THE SUPPLY SCHEDULE, P. 67 SCHEDULE, Figure 3.6 THE MARKET SUPPLY FOR COMPACT DISKS, P. 66 COMPACT Figure 3.5 THE CONCEPT OF THE EQUILIBRIUM EQUILIBRIUM Intersection of DD and SS Intersection Sole point that is located on both the Sole market DD and market SS schedule (reluctant compromise) (reluctant Equilibrium price is the ONLY price Equilibrium sustainable by market forces alone Price above P(e) causes surplus Price below P(e) causes shortage Market forces cause disequilibrium Market prices to change See p. 73 21 21 THE SUPPLY AND DEMAND CURVES FOR TENNIS SHOES, P. 76 P. Figure 3.7 END OF CHAPTER 3 LECTURE QUESTIONS??????????? 23 23...
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