eco 6351 economics for managers chapter 3c supply and demand
Download
Skip this Video
Download Presentation
Eco 6351 Economics for Managers Chapter 3c. Supply and Demand

Loading in 2 Seconds...

play fullscreen
1 / 19

Eco 6351 Economics for Managers Chapter 3c. Supply and Demand - PowerPoint PPT Presentation


  • 142 Views
  • Uploaded on

Eco 6351 Economics for Managers Chapter 3c. Supply and Demand. Prof. Vera Adamchik. Demand and Supply: Predicting Changes in Price and Quantity. A change in demand A change in supply A change in both demand and supply. An Increase in Demand. Initially, demand and supply are as shown here

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Eco 6351 Economics for Managers Chapter 3c. Supply and Demand' - linda-welch


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
demand and supply predicting changes in price and quantity
Demand and Supply: Predicting Changes in Price and Quantity
  • A change in demand
  • A change in supply
  • A change in both demand and supply
an increase in demand
An Increase in Demand
  • Initially, demand and supply are as shown here
  • The eqm price is $3 and the eqm quantity is 4 million tapes a week
an increase in demand1
An Increase in Demand
  • Then, demand increases
  • The demand curve shifts rightward
an increase in demand2
An Increase in Demand
  • At the original price, there is a shortage
an increase in demand3
An Increase in Demand
  • The quantity supplied increases and the price rises
  • The quantity demanded falls
an increase in demand4
An Increase in Demand
  • In the new equilibrium, the shortage has been eliminated
  • The new eqm price is $5 and the new eqm quantity is 6 million
a decrease in demand
A Decrease in Demand
  • Make your own diagram to illustrate this case
an increase in supply
An Increase in Supply
  • Initially, demand and supply are as shown here
  • The eqm price is $3 and the eqm quantity is 4 million tapes a week
an increase in supply1
An Increase in Supply
  • An increase in supply occurs and the supply curve shifts rightward
  • At the original price, there is a surplus of tapes
an increase in supply2
An Increase in Supply
  • Buyers are willing to buy more but at a lower price
  • So, the price falls
  • As the price falls, the quantity supplied decreases
an increase in supply3
An Increase in Supply
  • In the new equilibrium, the surplus has been eliminated
  • The new eqm price is $2 and the new eqm quantity is 6 million
a decrease in supply
A Decrease in Supply
  • Make your own diagram to illustrate this case
when both d and s change
When both D and S change
  • If both demand and supply change and we do not have any information about the magnitude of each shift, it is not possible to tell what happens to both equilibrium price and quantity.
when both d and s change1
When both D and S change…
  • Consider each shift separately, every time starting from the original equilibrium
  • Write down what will happen to the equilibrium price and equilibrium quantity as a result of each shift
  • Combine your conclusions from Step 2 and make your statement about the overall impact of all changes in demand and supply
changes in both demand and supply
Changes in both Demand and Supply
  • When both demand and supply increase, the equilibrium quantity traded increases but the equilibrium price may either rise or fall
changes in both demand and supply1
Changes in both Demand and Supply
  • When both demand and supply decrease, the equilibrium quantity traded decreases but the equilibrium price may either rise or fall
changes in both demand and supply2
Changes in both Demand and Supply
  • When demand decreases and supply increases, the equilibrium price falls and the equilibrium quantity traded might increase or decrease
changes in both demand and supply3
Changes in both Demand and Supply
  • When demand increases and supply decreases, the equilibrium price rises and the equilibrium quantity traded might increase or decrease
ad