ECON 100 1st Edition Lecture 6 Outline of Last Lecture I Supply A The Law of Supply B Quantity Supplied C Supply Curve D Factors that change supply II Change in Supply vs Change in Quantity Supplied Outline of Current Lecture I Market Equilibrium A Equilibrium Price B Equilibrium Quantity 1 Surplus 2 Shortage II Predicting Changes in Price and Quantity A Change in Demand B Change in Supply C Change in supply and demand Current Lecture Market Equilibrium Occurs when the price balances the plans of buyers and sellers Equilibrium Price the price at which the quantity demanded equals the quantity supplied Equilibrium Quantity the quantity bought and sold at the equilibrium price Price regulates buying and selling plans Price adjusts when plans don t match If the market price is above the equilibrium price the quantity supplied exceeds the quantity demanded and there is a surplus and the price is forced down If the market price is below the equilibrium price the quantity demanded exceeds the quantity supplied and there is a shortage and the price is forced up Predicting changes in price and quantity Change in Demand 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 Increase in demand equilibrium price rises and equilibrium quantity increases When demand decreases equilibrium price falls and equilibrium quantity decreases Change in Supply Increase in supply equilibrium price falls and equilibrium quantity increases Decrease in supply equilibrium price rises and equilibrium quantity decreases Change in Supply and Demand Increase in both supply and demand equilibrium quantity increases change in equilibrium price is uncertain Decrease in both supply and demand equilibrium quantity decreases change in equilibrium price is uncertain Decrease in demand and increase in supply lowers equilibrium price change in equilibrium quantity is uncertain Increase in demand and decrease in supply raises equilibrium price change in equilibrium quantity is uncertain