ECON 2000 1st Edition Lecture 8Outline of Last LectureXXII. Supplya. Supplyb. Quantity supplyc. Law of SupplyXXIII. Changes in supplya. Change in supplyb. Change in Quantity SuppliedXXIV. Determinants (MEMORIZE) a. Supplyb. Quantity SuppliedXXV. Market Balancea. Equilibriumb. Shortagec. SurplusOutline of Current Lecture XXVI. Changes in Demand and Supplya. Demand and supply change in opposite directionsb. Demand and supply change in same directionCurrent LectureXXVI. Changes in Demand and Supplya. Demand and supply change in opposite directions, i. Equilibrium price can be determined, but the change in the equilibrium. Output cannot.ii. A decrease in demand and an increase in supply will cause a fall in equilibrium price, but the effect on equilibrium quantity cannot be determined.1. For any quantity, consumers now place a lower value on the good,and producers are willing to accept a lower price; therefore, price will fall. The effect on output will depend on the relative size of the two changes.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.iii. An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be determined.1. For any quantity, consumers now place a higher value on the good,and producers must have a higher price in order to supply thegood; therefore, price will increase. The effect on output will depend on the relative size of the two changes.b. demand and supply change in the same directioniv. the change in the equilibrium output can be determined, but the change in the equilibrium price cannot.v. If both demand and supply increase, there will be an increase in the equilibrium output, but the effect on price cannot be determined.vi. If both demand and supply increase, consumers wish to buy more and firms wish to supply more so output will increase. However, since consumers place a higher value on each unit, but producers are willing to supply each unit at a lower price, the effect on price will depend on the relative size of the two changes.vii. If both demand and supply decrease, there will be a decrease in the equilibrium output, but the effect on price cannot be determined.viii. If both demand and supply decrease, consumers wish to buy less andfirmswish to supply less, so output will fall. However, since consumers place a lower value on each unit, but producers are willing to supply each unit only at higher prices, the effect on price will depend on the relative size of the two
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