Competitive markets, supply graphing, changes in supply and demand (3 pages)

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Competitive markets, supply graphing, changes in supply and demand



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Competitive markets, supply graphing, changes in supply and demand

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Mr. Clark talked about how to graph a supply schedule, Competitive Markets and how they work, factors that increase demand and Relationships between individual demand and market demand.


Lecture number:
4
Pages:
3
Type:
Lecture Note
School:
The University of Oklahoma
Course:
Econ 1123 - Princ. of Econ-Micro
Edition:
1

Unformatted text preview:

ECON 1123 1st Edition Lecture 4 Outline From Previous Lecture I The Circular Flow of Income A Resource Markets B Output Markets II Price Determination in Competitive Markets A Demand B Supply III Demand Determinants of Demand Review but with some new things added IV Demand Curves V Determinants of Supply A Price of the output or resource B Prices of the resources used to produce the output C Technology D Number of Sellers E Sellers expectation about future prices Outline Lecture 4 I Supply A Graphical View II Demand Supply and Price Determination in Competitive Markets III Changes in Demand and Supply A Increases in buyer s incomes B Stronger Buyer s tastes C Buyer s expect higher future prices and or higher future incomes D More buyers in the market E Higher prices for substitutes These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute F Lower Price for Compliments IV Relationship Between individual Demand and Market Demand Lecture 4 Notes V Supply A Graphical View When drawing a supply diagram the vertical axis will have the price per unit labeled as Q1 The horizontal axis will have your quantity over time labeled as Q T Note When drawing diagrams in this class you must always label the axis The supply schedule will most always increase to the right and the demand schedule decreases to the right This means that the graph of these together should make an X shape The point where the two schedules intersect is called the equilibrium point This will give us both the equilibrium price and the equilibrium quantity This point is usually where we stay unless there is some type of law that permits us If the price is decreased lower than the equilibrium point there are more people out there willing to buy at the new low price but fewer people willing to sell This excess demand is what causes shortages Note Sellers want to sell things at the highest possible price buyers want to



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