Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Economics Unit 4, Lesson 1 The Price System (Markets) ©2012, TESCCC Potential Buyers Potential Sellers Markets The interaction of buyers and sellers determines the price and quantity of most goods in a market system. ©2012, TESCCC Buyers and sellers have opposite goals. Buyers want the lowest price. Sellers want the highest price. ©2012, TESCCC Markets Draw Supply & Demand Demand Schedule $ QD 10.00 60 20.00 40 30.00 20 ©2012, TESCCC Supply Schedule $ QS 10.00 20 20.00 40 30.00 60 Market $ 30 S EP 20 10 D 20 ©2012, TESCCC 40 EQ 60 Q With supply and demand both on graph, we now have a market. Market equilibrium – where quantity demanded and quantity supplied are equal ©2012, TESCCC Based on 2 Assumptions 1. Everything in market has a price. 2. Price is best measure to answer the three basic economic questions. ©2012, TESCCC Prices act as signals. Signals to adjust – Demand – Supply ©2012, TESCCC Disequilibrium QS = QD This creates a shortage or a surplus. ©2012, TESCCC Surplus • A price above equilibrium creates a surplus. • A surplus is when QS is greater than QD. ©2012, TESCCC Surplus Excess Supply QS > QD P S 30 EP 20 D QD ©2012, TESCCC 40 EQ Q QS Shortage • A price below equilibrium created a shortage. • Shortage is when QD is greater than QS. ©2012, TESCCC Shortage Excess Demand $ QD > QS S EP20 10 D QS ©2012, TESCCC 40 EQ QD Q