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Demand and Supply Review ( Chp . 4)

Demand and Supply Review ( Chp . 4). What is the demand for a product? What is the supply of a product? What are the slopes of each? What is the relationship between the price and the quantity demanded and supplied?

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Demand and Supply Review ( Chp . 4)

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  1. Demand and Supply Review (Chp. 4) What is the demand for a product? What is the supply of a product? What are the slopes of each? What is the relationship between the price and the quantity demanded and supplied? What is the difference between a change in the quantity demanded and a change in demand?

  2. Demand and Supply Review (Chp. 4) Can you recall some factors that shift demand? • Prices of related goods • Income • Preferences • Expectations How do you explain/interpret the shift?

  3. Demand and Supply Review (Chp. 4) Can you recall some factors shifting supply? • The price of related goods • Productivity • Cost of inputs

  4. Demand and Supply Review (Chp. 4) What is meant by equilibrium? What is meant by a shortage vs surplus in the market? Can you describe how the market transitions to equilibrium when there is a surplus?

  5. Demand and Supply Review (Chp. 4) What are price rigidities? What is a price floor vs price ceiling? Does a price ceiling create a shortage or a surplus in the market?

  6. Examples • In the market for stocks • Analyze what happens if people expect them to have a higher price next year? State which side of the market is impacted, and how the economy transitions to the new equilibrium. 2)You operate a burger house producing beef and chicken burgers. The selling price of chicken burgers has increased. Analyze the impact on the beef market. Clearly state your assumptions.

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