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CHAPTER SIX. PRICES. When demand meets supply Demand greater than supply – shortage Supply greater than demand - surplus. Equilibrium. Price ceilings Rent control Price floors Minimum wage. Government interference with prices. Read 137-140

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Presentation Transcript
equilibrium
When demand meets supply
  • Demand greater than supply – shortage
  • Supply greater than demand - surplus
Equilibrium
government interference with prices
Price ceilings
    • Rent control
  • Price floors
    • Minimum wage
Government interference with prices
prices
Read 137-140
  • What is the argument for and against rent control?
  • With partner, answer number 1 + 2 on p. 138
Prices
prices1
What is the argument for and against minimum wage?
  • With partner, answer number 1 + 2 on p. 139
Prices
changes in market equilibrium
Moving toward Equilibrium

- Price and quantity will move toward equilibrium levels

Two Factors that can lead to Disequilibrium

-Shift in supply curve

-Shift in demand curve

Changes in Market Equilibrium
slide9
An Increase in Supply
    • A Changing Market that increases supply
      • Inventory will pile up (surplus)
      • Suppliers will reduce prices to clear out the surplus
      • With the lower price, demand will increase and the market will find equilibrium
slide10
A Decrease in Supply
    • As supply decreases, suppliers will raise their prices
    • Demand will fall
    • With the lower price, demand will increase and the market will find equilibrium
slide11
An Increase in Demand
    • Supply . . .
    • Price . . .
vocabulary
Supply shock
  • Rationing
  • Black market
Vocabulary
question of the day1
In your notebook:
    • Design a supply/demand curve that illustrates a change in equilibrium based on an increase in supply.
Question of the Day
review
Review
    • How does the government affect supply? (3)
    • How does the government affect prices? (2)
Review
chapter 6 pictionary time
Equilibrium
  • Disequilibrium
  • Shortage
  • Surplus
  • Supply shock
  • Rationing
  • Black Market
  • Price ceiling
  • Rent control
  • Price floor
  • Minimum wage
  • Inventory
  • Fad
Chapter 6: Pictionary Time
slide19
Sketch:
    • Advantages of Price-based system
    • Shortage and Surplus
    • P. 155
your group project 1 3 members
Design your own business
  • Select a name and product
  • Graph how your business would respond to:
      • Supply shock
      • Increase in supply
      • Decrease in demand
      • Increase in demand
  • Explain the reasons for the above
  • Be realistic and be neat!
  • Due at the end of class on Friday
Your Group Project (1-3 members)
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