Escolar Documentos
Profissional Documentos
Cultura Documentos
The Basics
• Demand Supply
Schedule schedule
.
• Price QTY Price QTY
• $3.50 320
$3.50 40
• $3.70 300
$3.70 100
• $3.90 280
• $4.10 260 $3.90 160
$5.10 320
What are three tasks that
the price system performs
for our economy?
B
$450
C
400
E
350
F
300
G
250
H
200
D
0 45 50 55 60 65 70 75
Quantity Demanded
in Billions of Xboxes per Year
D1
D0
Price per Xbox
C
$350
F
250
D1
D0
400
e
350
f
300
g
250
h
200
S
0 30 40 50 60 70 80 90
Quantity Supplied
in Billions of Xboxes per Year
S0
S1
c
Price per XBox
$400
f
310
S0
S1
Quantity Supplied
in Billions of XBox per Year
450
400
E
350
300
g G
250
D
200
S
0 30 40 50 60 70 80 90
Quantity
in Billions of Xbox 360 per Year
• Excess demand, or
shortage, is the
condition that exists
when quantity
demanded exceeds
quantity supplied at the
current price.
• When quantity demanded
exceeds quantity supplied,
price tends to rise until
equilibrium is restored.
Excess Supply
• Excess supply, or
surplus, is the condition
that exists when quantity
supplied exceeds
quantity demanded at
the current price.
• When quantity supplied
exceeds quantity demanded,
price tends to fall until
equilibrium is restored.
Changes in
Equilibrium (IRDL)