Class3_4 - Econ 100 1 Winter 2012: Professor Bushnell Econ...

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Unformatted text preview: Econ 100 1 Winter 2012: Professor Bushnell Econ 100 Class 3&4: Market Equilibria James Bushnell Econ 100 2 Winter 2012: Professor Bushnell Market Equilibrium Equilibrium- a situation in which no one wants to change his or her behavior. excess demand the amount by which the quantity demanded exceeds the quantity supplied at a specified price. Creates upward pressure on prices excess supply the amount by which the quantity supplied is greater than the quantity demanded at a specified price Creates downward pressure on prices Econ 100 3 Winter 2012: Professor Bushnell Market Equilibrium p , $ per kg 220 176 D S e 233 246 194 207 Q , Million kg of po r k per y ear 3.95 3.30 2.65 Excess supply = 39 Excess demand = 39 Market equilibrium point! Econ 100 4 Winter 2012: Professor Bushnell Using Math to Determine the Equilibrium Demand: Q d = 286 20 p Supply: Q s = 88 + 40p Equilibrium: Q d ( p ) = Q s ( p ) 286 20 p = 88 + 40p 60p = 198 P = $3.30 Q = 286 20(3.3) = 220 Econ 100...
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This note was uploaded on 02/01/2012 for the course ECN 100 taught by Professor Parman during the Winter '08 term at UC Davis.

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Class3_4 - Econ 100 1 Winter 2012: Professor Bushnell Econ...

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