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.
The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D).
^ This price will be achieved when supply and demand balance.
  • Law of Supply and Demand - Trump Business Briefings 9 January 2010 22:50 UTC www.trumpuniversity.com [Source type: General]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ The demand for a product is the quantity that buyers will be willing to purchase at a given price.
  • Demand and supply for goods and services | Business Studies Theory | Business & Marketing Resources 9 January 2010 22:50 UTC www.thetimes100.co.uk [Source type: News]

The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
.Supply and demand is an economic model of price determination in a market.^ Today, the supply-demand model is one of the fundamental concepts of economics.
  • Supply and Demand 9 January 2010 22:50 UTC www.netmba.com [Source type: FILTERED WITH BAYES]

^ We then put the forces of supply and demand together to determine market equilibrium.
  • Module Intro -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ This price will be achieved when supply and demand balance.
  • Law of Supply and Demand - Trump Business Briefings 9 January 2010 22:50 UTC www.trumpuniversity.com [Source type: General]

.It concludes that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity.^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ They are demand curves that move as a function of what the supply curve is and what the prices are.
  • Does supply and demand determine markets? | Dan Ariely | Big Think 9 January 2010 22:50 UTC bigthink.com [Source type: Original source]

^ Conversely prices will tend to fall when the quantity supplied exceeds the quantity demanded.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

Contents

The graphical representation of supply and demand

.The supply-demand model is a partial equilibrium model representing the determination of the price of a particular good and the quantity of that good which is traded.^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

.Although it is normal to regard the quantity demanded and the quantity supplied as functions of the price of the good, the standard graphical representation, usually attributed to Alfred Marshall, has price on the vertical axis and quantity on the horizontal axis, the opposite of the standard convention for the representation of a mathematical function.^ At price = 10, the quantity supplied = 16.

^ They are demand curves that move as a function of what the supply curve is and what the prices are.
  • Does supply and demand determine markets? | Dan Ariely | Big Think 9 January 2010 22:50 UTC bigthink.com [Source type: Original source]

^ Conversely prices will tend to fall when the quantity supplied exceeds the quantity demanded.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.Determinants of supply and demand other than the price of the good in question, such as consumers' income, input prices and so on, are not explicitly represented in the supply-demand diagram.^ This price will be achieved when supply and demand balance.
  • Law of Supply and Demand - Trump Business Briefings 9 January 2010 22:50 UTC www.trumpuniversity.com [Source type: General]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ The price level of a good essentially is determined by the point at which quantity supplied equals quantity demanded.
  • Supply and Demand 9 January 2010 22:50 UTC www.netmba.com [Source type: FILTERED WITH BAYES]

.Changes in the values of these variables are represented by shifts in the supply and demand curves.^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ So far we have been looking at the impact on the demand curve and the supply curve as a result of changes in various factors.
  • Interactive Supply and Demand 3 9 January 2010 22:50 UTC www.bized.co.uk [Source type: FILTERED WITH BAYES]

^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

.By contrast, responses to changes in the price of the good are represented as movements along unchanged supply and demand curves.^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ They are demand curves that move as a function of what the supply curve is and what the prices are.
  • Does supply and demand determine markets? | Dan Ariely | Big Think 9 January 2010 22:50 UTC bigthink.com [Source type: Original source]

^ What happens to the quantity demanded when the price of a good changes?
  • Elasticity of Supply and Demand - determinants of elasticity, total revenue 9 January 2010 22:50 UTC www.basiceconomics.info [Source type: FILTERED WITH BAYES]

Supply schedule

.The supply schedule, depicted graphically as the supply curve, represents the amount of some good that producers are willing and able to sell at various prices, assuming ceteris paribus, that is, assuming all determinants of supply other than the price of the good in question, such as technology and the prices of factors of production, remain the same.^ However, when graphing the supply curve all factors are held constant, except the price.
  • Economics Fundamentals: The Law of Supply 9 October 2009 21:13 UTC www.articlesbase.com [Source type: FILTERED WITH BAYES]

^ A. The Supply curve is a schedule showing how much will be supplied at various prices.
  • Using Supply and Demand 9 January 2010 22:50 UTC s01.middlebury.edu [Source type: FILTERED WITH BAYES]
  • Using Supply and Demand 9 October 2009 21:13 UTC s07.middlebury.edu [Source type: FILTERED WITH BAYES]

^ A change in any variable other than price that influences quantity demanded produces a shift in the demand curve.
  • Module Summary -- Supply and Demand 9 October 2009 21:13 UTC www.econweb.com [Source type: Original source]

.Under the assumption of perfect competition, supply is determined by marginal cost.^ The textbook monopsony model is based on several assumptions, including: (1) the competitive firms are free to choose the quantity that they will provide to the monopsonist; (2) that the input purchase price for the monopsonist is assumed equal to industry marginal cost; and (3) that the monopsonist has perfect knowledge of the industry supply curve and will exploit that knowledge.
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

^ For example, in the market for oil, the determinants of supply will include the success of oil exploration and discovery (a big new discovery will increase supply), while in the market for computers, technological innovations that lower chip costs will increase supply.
  • Supply and demand - Encyclopedia of Earth 9 January 2010 22:50 UTC www.eoearth.org [Source type: FILTERED WITH BAYES]

^ If all production were under conditions or perfect competition or perfect monopoly, managing firms would be dead easy.

.Firms will produce additional output as long as the cost of producing an extra unit of output is less than the price they will receive.^ The firm faces a market price of $10 for each unit of its output.
  • Economics: Labor Demand and Supply in a Perfectly Competitive Market - CliffsNotes 9 January 2010 22:50 UTC www.cliffsnotes.com [Source type: General]

^ And they could have had the price higher than it was.
  • On-Demand Supply Chain - Forbes.com 9 January 2010 22:50 UTC www.forbes.com [Source type: News]

^ Producer Surplus of a price-taking firm .
  • Chapter 9: Perfectly Competitive Markets 9 October 2009 21:13 UTC www.albany.edu [Source type: Academic]

Demand schedule

.The demand schedule, depicted graphically as the demand curve, represents the amount of some good that buyers are willing and able to purchase at various prices, assuming all determinants of demand other than the price of the good in question, such as income, personal tastes, the price of substitute goods, and the price of complementary goods, remain the same.^ Demand curves are derived while holding constant: Income and tastes Income, tastes, and the price of other goods Tastes and the price of other goods Income, tastes, and the price of the good Answer: Income, tastes, and the price of other goods .
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ A. The Supply curve is a schedule showing how much will be supplied at various prices.
  • Using Supply and Demand 9 January 2010 22:50 UTC s01.middlebury.edu [Source type: FILTERED WITH BAYES]
  • Using Supply and Demand 9 October 2009 21:13 UTC s07.middlebury.edu [Source type: FILTERED WITH BAYES]

^ A change in any variable other than price that influences quantity demanded produces a shift in the demand curve.
  • Module Summary -- Supply and Demand 9 October 2009 21:13 UTC www.econweb.com [Source type: Original source]

.Following the law of demand, the demand curve is almost always represented as downward-sloping, meaning that as price decreases, consumers will buy more of the good.^ So the demand curve will decrease, it will have negative slope.
  • Graphical methods III: the slugs bounce back 9 October 2009 21:13 UTC plus.maths.org [Source type: FILTERED WITH BAYES]

^ Demand Curve for market with 1000 consumers .

^ And when the price of a good falls then, normally, people will buy more of it.

[1]
.Just as the supply curves reflect marginal cost curves, demand curves are determined by marginal utility curves.^ Demand and supply curves for a tabloid newspaper (e.g.
  • Demand and supply | Business Studies Theory | Business & Marketing Resources 9 January 2010 22:50 UTC www.thetimes100.co.uk [Source type: FILTERED WITH BAYES]

^ A. The industry has normally sloped supply and demand curves that determine: .
  • Using Supply and Demand 9 January 2010 22:50 UTC s01.middlebury.edu [Source type: FILTERED WITH BAYES]
  • Using Supply and Demand 9 October 2009 21:13 UTC s07.middlebury.edu [Source type: FILTERED WITH BAYES]

^ What is the correlation between supply and demand curve?
  • Shifts of Supply and Demand 9 January 2010 22:50 UTC biz-development.com [Source type: General]

[2] .Consumers will be willing to buy a given quantity of a good, at a given price, if the marginal utility of additional consumption is equal to the opportunity cost determined by the price, that is, the marginal utility of alternative consumption choices.^ Conversely, the quantity of goods that producers are willing to produce at this price is Q1.
  • Economics Basics: Demand and Supply 9 January 2010 22:50 UTC www.investopedia.com [Source type: FILTERED WITH BAYES]

^ In an important sense, the “price” that people pay for consumption is this opportunity cost.
  • Economics: Pricing, Demand, and Economic Efficiency—A Primer - Basic Economic Concepts: Highway Supply and Demand - FHWA Operations 9 January 2010 22:50 UTC ops.fhwa.dot.gov [Source type: News]

^ The price level of a good essentially is determined by the point at which quantity supplied equals quantity demanded.
  • Supply and Demand 9 January 2010 22:50 UTC www.netmba.com [Source type: FILTERED WITH BAYES]

.The demand schedule is defined as the willingness and ability of a consumer to purchase a given product in a given frame of time.^ Demand Demand is defined as the quantity of a product that buyers are willing to purchase from the market at a given price.
  • Supply Demand - Futures Trading – Online Futures Trading – Excel Futures, Inc. 9 January 2010 22:50 UTC www.excelfutures.com [Source type: General]

^ The demand for a product may be inelastic if there are no close substitutes and if expenditures on the product constitute only a small part of the consumer’s income.
  • supply and demand (economics) -- Britannica Online Encyclopedia 9 January 2010 22:50 UTC www.britannica.com [Source type: FILTERED WITH BAYES]

^ Conclusions: Consumers get a better price when there is a good supply of the item they want to purchase than when the item is scarce and demand for it is high.

.As described above, the demand curve is generally downward-sloping.^ So the demand curve will decrease, it will have negative slope.
  • Graphical methods III: the slugs bounce back 9 October 2009 21:13 UTC plus.maths.org [Source type: FILTERED WITH BAYES]

^ Demand curves slope downward.

^ Note that the demand curve in Figure 4 slopes downward.
  • Supply and demand - Encyclopedia of Earth 9 January 2010 22:50 UTC www.eoearth.org [Source type: FILTERED WITH BAYES]

.There may be rare examples of goods that have upward-sloping demand curves.^ So the demand curve will decrease, it will have negative slope.
  • Graphical methods III: the slugs bounce back 9 October 2009 21:13 UTC plus.maths.org [Source type: FILTERED WITH BAYES]

^ Demand curves slope downward.

^ The reason we said “close to $8,000″ is that the supply curve is typically upward-sloping, not vertical, as shown on the graph in that follow-up post.
  • Roubini Global Economics - RGE Monitor -- U.S. EconoMonitor 9 January 2010 22:50 UTC www.roubini.com [Source type: News]

.Two different hypothetical types of goods with upward-sloping demand curves are Giffen goods (an inferior but staple good) and Veblen goods (goods made more fashionable by a higher price).^ So the demand curve will decrease, it will have negative slope.
  • Graphical methods III: the slugs bounce back 9 October 2009 21:13 UTC plus.maths.org [Source type: FILTERED WITH BAYES]

^ But is this because their supply curves differ or their demand curves differ?
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

^ Demand curves slope downward.

Micro Economics

Equilibrium

.Equilibrium is defined to the price-quantity pair where the quantity demanded is equal to the quantity supplied, represented by the intersection of the demand and supply curves.^ At price = 10, the quantity supplied = 16.

^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ They are demand curves that move as a function of what the supply curve is and what the prices are.
  • Does supply and demand determine markets? | Dan Ariely | Big Think 9 January 2010 22:50 UTC bigthink.com [Source type: Original source]

Changes in market equilibrium

.Practical uses of supply and demand analysis often center on the different variables that change equilibrium price and quantity, represented as shifts in the respective curves.^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

.Comparative statics of such a shift traces the effects from the initial equilibrium to the new equilibrium.^ A new business will not, as a rule, have any such effect.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ The figure titled "Equilibrium After a Supply Curve Shift" plots the new equilibrium after the leftward shift of the supply curve.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ For each possible shift in the supply or demand curve, a similar graph can be constructed showing the effect on equilibrium price and quantity.
  • Supply and Demand 9 January 2010 22:50 UTC www.netmba.com [Source type: FILTERED WITH BAYES]

Demand curve shifts

An out-ward or right-ward shift in demand increases both equilibrium price and quantity
.When consumers increase the quantity demanded at a given price, it is referred to as an increase in demand.^ As prices fall, demand increases.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

.Increased demand can be represented on the graph as the curve being shifted to the right.^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ It can be represented on a graph as a line or curve by plotting the quantity demanded at each price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.At each price point, a greater quantity is demanded, as from the initial curve D1 to the new curve D2.^ It can be represented on a graph as a line or curve by plotting the quantity demanded at each price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ A. Greater quantities sell at lower prices .
  • Understanding the Law of Supply and Demand 9 January 2010 22:50 UTC www.auburn.edu [Source type: FILTERED WITH BAYES]

^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

.In the diagram, this raises the equilibrium price from P1 to the higher P2.^ This raises the equilibrium price from P0 to the higher P1 .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ As the diagram also shows, this tends to raise the price as well.
  • Economics Interactive Lecture: Supply and Demand 9 January 2010 22:50 UTC hadm.sph.sc.edu [Source type: FILTERED WITH BAYES]

^ Tea is the opposite, at that price more people want it, so the buyers will bid higher until the equilibrium is met.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

.This raises the equilibrium quantity from Q1 to the higher Q2.^ This raises the equilibrium quantity from Q0 to the higher Q1 .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The new equilibrium will have a higher price and a lower quantity.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ On the right-hand chart below, the shift in the demand curve moves the market equilibrium from point A to point B, resulting in a higher price (from $3 to $4) and higher quantity (from 30 to 40).
  • http://sorrel.humboldt.edu/%7Eeconomic/econ104/sandd/ 9 January 2010 22:50 UTC sorrel.humboldt.edu [Source type: FILTERED WITH BAYES]

.A movement along the curve is described as a "change in the quantity demanded" to distinguish it from a "change in demand," that is, a shift of the curve.^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.In the example above, there has been an increase in demand which has caused an increase in (equilibrium) quantity.^ There will be a change in supply and a change in quantity demanded.
  • Model of Supply and Demand 9 January 2010 22:50 UTC ingrimayne.com [Source type: FILTERED WITH BAYES]

^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ If there is an increase in demand… .

.The increase in demand could also come from changing tastes and fashions, incomes, price changes in complementary and substitute goods, market expectations, and number of buyers.^ As prices fall, demand increases.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ If the price of a good increases, the demand for its complement will decrease.

^ Increased income will lower the demand for what we call inferior goods .
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

.This would cause the entire demand curve to shift changing the equilibrium price and quantity.^ Identify factors that will cause demand curves to shift.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ It can be represented on a graph as a line or curve by plotting the quantity demanded at each price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.If the demand decreases, then the opposite happens: a shift of the curve to the left.^ So the demand curve will decrease, it will have negative slope.
  • Graphical methods III: the slugs bounce back 9 October 2009 21:13 UTC plus.maths.org [Source type: FILTERED WITH BAYES]

^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.If the demand starts at D2, and decreases to D1, the price will decrease, and the quantity will decrease.^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Demand Decrease: price decreases, quantity decreases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

.This is an effect of demand changing.^ Notice that this is purely an effect of demand changing.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ When there is a change in amount purchased (tied to demand) due to lower prices and surplus spending money it is called the income effect .

^ While changing demand can have a significant effect on gasoline inventories, so can weather-related factors, particularly hurricanes.

.The quantity supplied at each price is the same as before the demand shift (at both Q1 and Q2).^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ After the shift of the supply curve, at the same price of $4, quantity supplied is only 20 (point A').
  • http://sorrel.humboldt.edu/%7Eeconomic/econ104/sandd/ 9 January 2010 22:50 UTC sorrel.humboldt.edu [Source type: FILTERED WITH BAYES]

.The equilibrium quantity, price and demand are different.^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Demand Decrease: price decreases, quantity decreases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ At price = 10, the quantity demanded = 30.

.At each point, a greater amount is demanded (when there is a shift from D1 to D2).^ With a shift in demand, the equilibrium point also completely shifts.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

^ Perhaps the answer is that the demand schedule in real terms cannot shift outwards; that there can only be a movement down an aggregate demand schedule to effect the secular increase in *quantity demanded*?

^ It's one of the best descriptions out there, and it points to the imbalance between supply and demand for gasoline and oil.
  • Gas prices: It's supply and demand, and you wouldn't want the alternative - USATODAY.com 9 January 2010 22:50 UTC www.usatoday.com [Source type: News]


.The demand curve "shifts" because a non-price determinant of demand has changed.^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ Equilibrium price and quantity change after a shift in the supply curve.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.Graphically the shift is due to a change in the x-intercept.^ Likewise a shift in demand due to changing consumer preferences will also influence the market price.
  • Futures Options Secrets - supply&demand 9 January 2010 22:50 UTC deltaneutraltrading.com [Source type: FILTERED WITH BAYES]

^ The big changes, both up and down, in the returns to education were due to shifts in the relative supply of educated workers.
  • Education and technology: Supply, demand, and income inequality | vox - Research-based policy analysis and commentary from leading economists 9 January 2010 22:50 UTC www.voxeu.org [Source type: FILTERED WITH BAYES]

^ The demand curve for bonds shifts due to changes in wealth, expected relative returns, risk, and liquidity.
  • Shifts in Supply and Demand for Bonds | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

.A shift in the demand curve due to a change in a non-price determinant of demand will result in the market's being in a non-equilibrium state.^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ With a shift in demand, the equilibrium point also completely shifts.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

.If the demand curve shifts out the result will be a shortage — at the new market price quantity demanded will exceed quantity supplied.^ A surplus occurs when quantity supplied exceeds quantity demanded.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ I. When, at the price ruling, demand exceeds supply, the price tends to rise.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ At price = 10, the quantity supplied = 16.

.If the demand curve shifts in, there will be a surplus — at the new market price quantity supplied will exceed quantity demanded.^ A surplus occurs when quantity supplied exceeds quantity demanded.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ I. When, at the price ruling, demand exceeds supply, the price tends to rise.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

.The process by which a new equilibrium is established is not the province of comparative statics — the answers to issues concerning when, whether and how a new equilibrium will be established are issues that are addressed by stochastic models — economic dynamics.^ That is an extremely dangerous bridge we have to cross before we adopt new economic models to fit new physical realities.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ This sort of dynamic solution is only possible when organizations embrace a business model that integrates demand and supply processes.
  • IndustryWeek : Demand and Supply Integration: A Key to Improved Firm Performance 9 January 2010 22:50 UTC www.industryweek.com [Source type: General]

^ Part IV addresses issues involved in the modeling of teacher supply, demand, and quality phenomena.
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

Supply curve shifts

An out-ward or right-ward shift in supply reduces equilibrium price but increases quantity
.When the suppliers' costs change for a given output, the supply curve shifts in the same direction.^ If any of them changes, the entire supply curve will move or shift.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ Technology : A technological change will shift the market supply curve to the right.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ This will shift the current supply curve to the left.
  • Economics Fundamentals: The Law of Supply 9 October 2009 21:13 UTC www.articlesbase.com [Source type: FILTERED WITH BAYES]

.For example, assume that someone invents a better way of growing wheat so that the cost of growing a given quantity of wheat decreases.^ For example, assume that someone invents a better way of growing wheat so that the amount of wheat that can be grown for a given cost will increase.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ For example, suppose new technology lowers the cost of growing wheat.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ It's very easy to assume that buying a £25 organic tee could be done without much thought but for many, there are much better ways to spend that money.
  • Supply and demand ‹ Columns — HUCK Magazine 9 January 2010 22:50 UTC www.huckmagazine.com [Source type: General]

.Otherwise stated, producers will be willing to supply more wheat at every price and this shifts the supply curve S1 outward, to S2—an increase in supply.^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ As you increase the supply, prices get lower.
  • Alex Merced Discussing Supply And Demand Video – 5min.com 9 January 2010 22:50 UTC www.5min.com [Source type: General]

^ This will shift the current supply curve to the left.
  • Economics Fundamentals: The Law of Supply 9 October 2009 21:13 UTC www.articlesbase.com [Source type: FILTERED WITH BAYES]

.This increase in supply causes the equilibrium price to decrease from P1 to P2.^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ A. Higher prices decreases the demand and increases the supply .
  • Understanding the Law of Supply and Demand 9 January 2010 22:50 UTC www.auburn.edu [Source type: FILTERED WITH BAYES]

^ As you increase the supply, prices get lower.
  • Alex Merced Discussing Supply And Demand Video – 5min.com 9 January 2010 22:50 UTC www.5min.com [Source type: General]

.The equilibrium quantity increases from Q1 to Q2 as the quantity demanded extends at the new lower prices.^ The demand equation now indicates that the quantity demanded is lower at all prices.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Lower demand makes both the price and the quantity fall.
  • Economics Interactive Lecture: Supply and Demand 9 January 2010 22:50 UTC hspm.sph.sc.edu [Source type: FILTERED WITH BAYES]

.In a supply curve shift, the price and the quantity move in opposite directions.^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ After the shift of the supply curve, at the same price of $4, quantity supplied is only 20 (point A').
  • http://sorrel.humboldt.edu/%7Eeconomic/econ104/sandd/ 9 January 2010 22:50 UTC sorrel.humboldt.edu [Source type: FILTERED WITH BAYES]

.If the quantity supplied decreases at a given price, the opposite happens.^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ What happens to the price and the quantity if supply increases by 30 units?
  • Interactive Supply and Demand 3 9 January 2010 22:50 UTC www.bized.co.uk [Source type: FILTERED WITH BAYES]

.If the supply curve starts at S2, and shifts inward to S1, demand contracts, the equilibrium price will increase, and the equilibrium quantity will decrease.^ As prices fall, demand increases.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

.This is an effect of supply changing.^ Notice that this is purely an effect of supply changing.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Like a shift in the demand curve, a shift in the supply curve implies that the original supply curve has changed, meaning that the quantity supplied is effected by a factor other than price.
  • Economics Basics: Demand and Supply 9 January 2010 22:50 UTC www.investopedia.com [Source type: FILTERED WITH BAYES]

^ How adequate are they for analyzing the effects on teacher supply, demand, and quality of changes in pertinent conditions and policies?
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

.The quantity demanded at each price is the same as before the supply shift (at both Q1 and Q2).^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Conversely prices will tend to fall when the quantity supplied exceeds the quantity demanded.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.The equilibrium quantity, price and supply changed.^ At price = 10, the quantity supplied = 16.

^ When the price of the product changes, the quantity supplied changes, but supply does not change.
  • Supply and Demand - laws, equilibrium curve matching, business input prices 9 January 2010 22:50 UTC www.basiceconomics.info [Source type: FILTERED WITH BAYES]

^ And, changes in the supply of outputs can alter output prices.
  • Gas Prices Fact or Fiction: A Primer on Supply and Demand - Tom Lehman - Mises Institute 9 January 2010 22:50 UTC mises.org [Source type: FILTERED WITH BAYES]

.When there is a change in supply or demand, there are four possible movements.^ The law of supply and demand will drive the change.
  • Teaching with Technology - Supply and Demand 9 January 2010 22:50 UTC www.powertolearn.com [Source type: General]

^ There are two types of changes in demand: .

^ As one of the key determinants to price movements, supply and demand developments together with currency and agricultural policy remain crucial to monitor.
  • HGCA - Supply and Demand 9 January 2010 22:50 UTC www.hgca.com [Source type: News]
  • HGCA - Supply and Demand 9 January 2010 22:50 UTC www.hgca.com [Source type: News]

.The demand curve can move inward or outward.^ Consumers shifted to more fuel efficient cars (a boon for Japanese makers, and a bane for Detroit), and the demand curve moved to the left.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ I understand that an increase (shift) in demand moves us along the supply curve.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ If the frozen yogurt demand falls as a result of the frozen yogurt *supply curve* moving, then more yogurt (and less ice cream) will be consumed.” .
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

.The supply curve can also move inward or outward.^ The oil supply curve moved to the right.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ They are demand curves that move as a function of what the supply curve is and what the prices are.
  • Does supply and demand determine markets? | Dan Ariely | Big Think 9 January 2010 22:50 UTC bigthink.com [Source type: Original source]

^ If any of them changes, the entire supply curve will move or shift.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

Elasticity

.Elasticity is a central concept in the theory of supply and demand.^ An important concept in understanding supply and demand theory is elasticity .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ This is known as the price elasticity of demand and the price elasticity of supply .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ In general the theory claims that where goods are traded in a market at a price where consumers demand more goods than firms are prepared to supply, this shortage will tend to increase the price of the goods.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.In this context, elasticity refers to how supply and demand respond to various factors, including price as well as other stochastic principles.^ But supply is “elastic”, it does grow with price.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ A. The Supply curve is a schedule showing how much will be supplied at various prices.
  • Using Supply and Demand 9 January 2010 22:50 UTC s01.middlebury.edu [Source type: FILTERED WITH BAYES]
  • Using Supply and Demand 9 October 2009 21:13 UTC s07.middlebury.edu [Source type: FILTERED WITH BAYES]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

.One way to define elasticity is the percentage change in one variable divided by the percentage change in another variable (known as arc elasticity, which calculates the elasticity over a range of values, in contrast with point elasticity, which uses differential calculus to determine the elasticity at a specific point).^ One way of defining elasticity is the percentage change in one variable divided by the percentage change in another variable (known as arch elasticity because it calculates the elasticity over a range of values - This can be contrasted with point elasticity that uses differential calculus to determine the elasticity at a specific point).
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ This is one of the reasons why economists often use relative changes in percentages, or elasticity.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ We have said that one way of calculating elasticity is the percentage change in quantity over the percentage change in price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.It is a measure of relative changes.^ Thus it is a measure of relative changes.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Price elasticity of supply measures the relative changes in quantity supplied when price changes.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ First, the introduction of a methodological change in measuring the CPI in January 1999 lowered CPI inflation relative to the earlier period.
  • FRB: Speech, Meyer -- The New Economy Meets Supply and Demand -- June 6, 2000 9 January 2010 22:50 UTC www.federalreserve.gov [Source type: FILTERED WITH BAYES]

.Often, it is useful to know how the quantity demanded or supplied will change when the price changes.^ At price = 10, the quantity supplied = 16.

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Mathematically, it is simply the percentage change in quantity demanded divided by the percentage change in price.
  • Economics: Pricing, Demand, and Economic Efficiency—A Primer - Basic Economic Concepts: Highway Supply and Demand - FHWA Operations 9 January 2010 22:50 UTC ops.fhwa.dot.gov [Source type: News]

.This is known as the price elasticity of demand and the price elasticity of supply.^ But supply is “elastic”, it does grow with price.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ Price elasticity of supply is analogous to price elasticity of demand from Chapter 5.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

.If a monopolist decides to increase the price of their product, how will this affect their sales revenue?^ Lower prices, expecting to increase sales.
  • Creativity: Supply vs. Demand « Scott Berkun 9 January 2010 22:50 UTC www.scottberkun.com [Source type: General]

^ If a monopolist decides to increase the price of their product, how will this effect their sales revenue?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Thus, if the price of a commodity decreases by 10 percent, and the sales of it consequently increase by 20 percent, the elasticity of demand for that commodity is said to be 2.
  • supply and demand (economics) -- Britannica Online Encyclopedia 9 January 2010 22:50 UTC www.britannica.com [Source type: FILTERED WITH BAYES]

.Will the increased unit price offset the likely decrease in sales volume?^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Lower prices, expecting to increase sales.
  • Creativity: Supply vs. Demand « Scott Berkun 9 January 2010 22:50 UTC www.scottberkun.com [Source type: General]

^ Will the increased unit price offset the likely decrease in sales volume?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.If a government imposes a tax on a good, thereby increasing the effective price, how will this affect the quantity demanded?^ If a government imposes a tax on a good, thereby increasing the effecive price, how will this effect the quantity demanded?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ If the price of a good increases, the demand for its complement will decrease.

.Elasticity corresponds to the slope of the line and is often expressed as a percentage.^ Another reason is that elasticity is more than just the slope of the fuction: It is the slope of a function in a coordinate space, that is, a line with a constant slope will have different elasticity at various points.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ This is one of the reasons why economists often use relative changes in percentages, or elasticity.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

In other words, the units of measure (such as gallons vs. quarts, say for the response of quantity demanded of milk to a change in price) do not matter, only the slope. Since supply and demand can be curves as well as simple lines the slope, and hence the elasticity, can be different at different points on the line.
.Elasticity is calculated as the percentage change in quantity over the associated percentage change in price.^ Since the elasticity depends on the percentages, the quantity of pens increased by 2%, and the price increased by 5%, so the elasticity is 2/5 or 0.4.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Price elasticity of supply measures the relative changes in quantity supplied when price changes.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ We have said that one way of calculating elasticity is the percentage change in quantity over the percentage change in price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.For example, if the price moves from $1.00 to $1.05, and the quantity supplied goes from 100 pens to 102 pens, the slope is 2/0.05 or 40 pens per dollar.^ Supply Increase: price decreases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ In the example below, P 1 is the equilibrium price and Q 1 is the equilibrium quantity.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ Initially at a price of $4, quantity supplied was 40.
  • http://sorrel.humboldt.edu/%7Eeconomic/econ104/sandd/ 9 January 2010 22:50 UTC sorrel.humboldt.edu [Source type: FILTERED WITH BAYES]

Since the elasticity depends on the percentages, the quantity of pens increased by 2%, and the price increased by 5%, so the price elasticity of supply is 2/5 or 0.4.
.Since the changes are in percentages, changing the unit of measurement or the currency will not affect the elasticity.^ Since the changes are in percentages, changing the unit of measurement or the currency will not effect the elasticity.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The responsiveness of the quantity of travel demanded to changes in the price of travel is measured by travel demand elasticity .
  • Economics: Pricing, Demand, and Economic Efficiency—A Primer - Basic Economic Concepts: Highway Supply and Demand - FHWA Operations 9 January 2010 22:50 UTC ops.fhwa.dot.gov [Source type: News]

^ Since the elasticity depends on the percentages, the quantity of pens increased by 2%, and the price increased by 5%, so the elasticity is 2/5 or 0.4.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.If the quantity demanded or supplied changes a lot when the price changes a little, it is said to be elastic.^ But supply is “elastic”, it does grow with price.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ Conversely prices will tend to fall when the quantity supplied exceeds the quantity demanded.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ If the quantity changes little when the prices changes a lot, it is said to be inelastic.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.If the quantity changes little when the prices changes a lot, it is said to be inelastic.^ If the quantity changes little when the prices changes a lot, it is said to be inelastic.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ If the quantity demanded or supplied changes a lot when the price changes a little, it is said to be elastic.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Perfectly inelastic supply occurs when quantity supplied does not change if price changes.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

.An example of perfectly inelastic supply, or zero elasticity, is represented as a vertical supply curve.^ The value of perfectly elastic supply is infinite.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ These conditions create a vertical supply curve, giving it zero elasticity (ie.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Perfectly inelastic would be if the curve is vertical.

(See that section below)
.Elasticity in relation to variables other than price can also be considered.^ Other than the price of gas, what is there?
  • Supply and Demand vs Price Gouging - toys Discussion Forum 9 January 2010 22:50 UTC www.amazon.com [Source type: General]

^ Elasticity in relation to variables other than price can also be considered.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ If the price rules lower than this, sooner or later they will close down, and we will be left with a smaller number of mines, among which great variations of conditions will still prevail.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

.One of the most common to consider is income.^ One of the most common to consider is income.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Most of us diversify in consumption but specialize in production; we divide our income among many consumption goods, but we get most of that income from selling one kind of labor.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ One of the reasons was that while we expect consumption of most goods to go up when income goes up, a Giffen good must be a good whose consumption goes down with increasing income--an inferior good.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

.How would the demand for a good change if income increased or decreased?^ Increased income will lower the demand for what we call inferior goods .
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ It would be an increase in demand for loanable funds.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ Why would demand for widgets increase?

.This is known as the income elasticity of demand.^ This is known as the income elasticity of demand .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ This is known as the price elasticity of demand and the price elasticity of supply .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Overall, on the reasonable assumption that wants are insatiable, and that the *overall* income elasticity of demand is equal to unity, demand has increased in line with supply.

.For example, how much would the demand for a luxury car increase if average income increased by 10%?^ It would be an increase in demand for loanable funds.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ Why would demand for widgets increase?

^ For example how much would the demand for a luxury car increase if average income increased by 10%?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.If it is positive, this increase in demand would be represented on a graph by a positive shift in the demand curve.^ The demand curve will shift to the right.
  • The Joy of Economics 9 January 2010 22:50 UTC faculty.winthrop.edu [Source type: FILTERED WITH BAYES]

^ It can be represented on a graph as a line or curve by plotting the quantity demanded at each price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The entire demand curve shifts to the right.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.At all price levels, more luxury cars would be demanded.^ For any given level of price, more oil is demanded.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ The market supply of hammers represents the total number of hammers you would be willing to make and sell at all price levels.
  • EconEdLink | Economic Spotter: Supply and Demand at the Gold Rush 9 January 2010 22:50 UTC www.econedlink.org [Source type: General]

^ We expect time-on-market will continue to lengthen and apply pressure on homeowner pricing decisions until buyers regain confidence and demand levels off.
  • Supply and Demand - Altos Research Real Estate Insights 9 January 2010 22:50 UTC www.altosresearch.com [Source type: General]

.Another elasticity sometimes considered is the cross elasticity of demand, which measures the responsiveness of the quantity demanded of a good to a change in the price of another good.^ Demand Increase: price increases, quantity increases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Demand Decrease: price decreases, quantity decreases.
  • Environmental Economics: Econ 101: The Basics of Supply and Demand 9 January 2010 22:50 UTC www.env-econ.net [Source type: General]

^ Answer: Ratio of the percentage change in quantity demanded to the percentage change in price.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

.This is often considered when looking at the relative changes in demand when studying complement and substitute goods.^ Related goods can either be substitutes or complements.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ This is often considered when looking at the relative changes in demand when studying complement and substitute goods .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ If the cross-price elasticity of demand between two goods is negative, then the two goods are: Unrelated goods Normal goods Complements Substitutes Answer: Complements .
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

.Complement goods are goods that are typically utilized together, where if one is consumed, usually the other is also.^ Complement goods are goods that are typically utilized together, where if one is consumed, usually the other is also.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Complements are goods that are normally consumed together.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ Complements are goods that are normally consumed together .
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.Substitute goods are those where one can be substituted for the other, and if the price of one good rises, one may purchase less of it and instead purchase its substitute.^ We learn that the price of Company A’s good, which is a substitute for one sold by Company B, has risen.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

^ Prices of Related Goods: Substitutes : goods that can be consumed in place of one another.
  • http://sorrel.humboldt.edu/%7Eeconomic/econ104/sandd/ 9 January 2010 22:50 UTC sorrel.humboldt.edu [Source type: FILTERED WITH BAYES]

^ Substitute goods are those where one can be substituted for the other and if the price of one good rises, one may purchase less of it and instead purchase its substitute.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.Cross elasticity of demand is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good.^ Answer: Ratio of the percentage change in quantity demanded to the percentage change in price.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ Ratio of the percentage change in price to the percentage change in quantity demanded.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ Ratio of the change in price to the change in quantity demanded.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

For an example with a complement good, if, in response to a 10% increase in the price of fuel, the quantity of new cars demanded decreased by 20%, the cross elasticity of demand would be -2.0.
.In a perfect economy, any market should be able to move to the equilibrium position instantly without travelling along the curve.^ Market equilibrium explains movement along the supply and demand curves.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

^ The general shape of the curve, especially it's slope near the equilibrium point, does however have an impact on how a market will adjust to changes in demand or supply.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Should credit-market unease push the U.S. economy into recession, all that excess demand could rapidly evaporate.
  • M.B.A.s Learn to Love the Law of Supply and Demand - Deal Journal - WSJ 9 January 2010 22:50 UTC blogs.wsj.com [Source type: News]

.Any change in market conditions would cause a jump from one equilibrium position to another at once.^ However, events are always happening that cause changes to the equilibrium.
  • Supply and Demand 9 January 2010 22:50 UTC arnoldkling.com [Source type: General]

^ If the cost of something in one market determines the price at which it is sold in another market, then yes, you would.
  • Gas Prices Fact or Fiction: A Primer on Supply and Demand - Tom Lehman - Mises Institute 9 January 2010 22:50 UTC mises.org [Source type: FILTERED WITH BAYES]

^ May 29, 2008 - 1:13am Westexas I was wondering if you would consider one valid change to export land.
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

So the perfect economy is actually analogous to the quantum economy. .Unfortunately in real economic systems, markets don't behave in this way, and both producers and consumers spend some time travelling along the curve before they reach equilibrium position.^ This way, interested parties can go check out the sponsors before telling ICANN what they think; the public comment period is open all April.
  • Can ICANN Reverse the Law of Supply and Demand? 9 January 2010 22:50 UTC www.seochat.com [Source type: General]

^ The concept is simple: Companies start producing more products, which boosts or at least stabilizes employment and wages, which drives consumer economic activity.
  • Putting Supply, Demand Together - WSJ.com 9 January 2010 22:50 UTC online.wsj.com [Source type: News]

^ Here are a couple of suggested topics, along with data, which will allow you to spend a lot less time on your project and simultaneously improve your grade.
  • Economics at About.Com - Past issues of weekly features and stories in economics 9 January 2010 22:50 UTC economics.about.com [Source type: FILTERED WITH BAYES]

.This is due to asymmetric, or at least imperfect, information, where no one economic agent could ever be expected to know every relevant condition in every market.^ No-one knows what this means.
  • Econbrowser: Supply and demand for judicial services 9 January 2010 22:50 UTC www.econbrowser.com [Source type: Original source]

^ From Cartel to Corporation: Drug Trade Economics Market conditions are forcing Mexican drug cartels to diversify their activities, becoming full-blown corporations complete with white-collar jobs.
  • Supply, Demand and Executive Pay - Economix Blog - NYTimes.com 9 January 2010 22:50 UTC economix.blogs.nytimes.com [Source type: FILTERED WITH BAYES]

^ August 19, 2007 - 12:25pm I wish we could get to a place where we could admit the truth that this kind of economic analysis has no relevance to an oligopolistic market in which a few players control supply and the availability of supply to meet demand is NOT a free market clearing process.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

.Ultimately both producers and consumers must rely on trial and error as well as prediction and calculation to find an the true equilibrium of a market.^ That is, how do we know that a consumer could not find another consumer and make a trade that would make them both better off?
  • Supply and Demand 9 January 2010 22:50 UTC arnoldkling.com [Source type: General]

^ Producers and consumers rely on prices as signals of the cost of making substitution decisions at the margin.
  • Supply and Demand 9 January 2010 22:50 UTC arnoldkling.com [Source type: General]

^ S&D is a model that says "that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity."
  • Supply and Demand vs Price Gouging - toys Discussion Forum 9 January 2010 22:50 UTC www.amazon.com [Source type: General]

Vertical supply curve (perfectly inelastic supply)

.
When demand D1 is in effect, the price will be P1.
^ If a government imposes a tax on a good, thereby increasing the effecive price, how will this effect the quantity demanded?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ SUPPLY AND DEMAND 6 HOW VOLUME IS THE CAUSE, IMBALANCE IS THE EFFECT, AND PRICE IS THE RESULT. EFFECTS OF MOMENTUM, AND...

^ When there is a change in amount purchased (tied to demand) due to lower prices and surplus spending money it is called the income effect .

When D2 is occurring, the price will be P2. The quantity is always Q, any shifts in demand will only affect price.
.If the quantity supplied is fixed no matter what the price, the supply curve is a vertical line, and supply is called perfectly inelastic.^ It can be represented on a graph as a line or curve by plotting the quantity demanded at each price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Equilibrium price and quantity change after a shift in the supply curve.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ If the price falls to $4 quantity supplied falls to 40, and so on.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

.In practice, vertical supply curves rarely exist.^ Vertical supply curve .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ A perfectly inelastic supply curve is vertical.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ I mentioned verticalization of the supply curve in an earlier post http://www.theoildrum.com/node/2757#comment-214106 , but haven't looked into this in detail.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

.As a hypothetical example, consider the supply curve of the land.^ The final step is to consider the situation in which there are many different producers, so that the supply curve is the sum of their individual supply curves.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ A change in the price level (for example brought about by a shift in AD) results in a movement along the short run aggregate supply curve.
  • Macroeconomics - Aggregate Supply 9 October 2009 21:13 UTC www.tutor2u.net [Source type: FILTERED WITH BAYES]

^ Figure 10 illustrates the special case of all-or-nothing supply for which hypothetical derived demand intersects competitive industry supply curve in its discontinuity.
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

.Suppose that no matter how much someone would be willing to pay for an additional piece, more land cannot be created.^ Then ask what would make them willing to pay more for one?
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ In this case, no matter how much someone would be willing to pay for one more acre of land, the extra cannot be created.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ That means that if you produced an additional unit, the value to you of the good would be more than the cost to you of the labor used to produce it, so you would be better off producing it.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

.Also, even if no one wanted all the land, it still would exist.^ Also, even if no one wanted all the land, it still would exist.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ I would reply that we all are still waiting.
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ It’s a trick question because one would naturally assume that “all other things are equal” holds.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

.In such a case, land would have a vertical supply curve, with zero elasticity.^ These conditions create a vertical supply curve, giving it zero elasticity (ie.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Perfectly inelastic would be if the curve is vertical.

^ Vertical supply curve .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

Other markets

.The model of supply and demand also applies to various specialty markets.^ Market review - Platinum supply & demand .
  • Market review - Platinum supply & demand 9 January 2010 22:50 UTC www.angloplatinum.com [Source type: News]

^ Supply and demand applies to any seller, any vendor.
  • Supply and Demand vs Price Gouging - toys Discussion Forum 9 January 2010 22:50 UTC www.amazon.com [Source type: General]

^ Figure 4.4, “Demand and Supply in the Stock Market” applies the model of demand and supply to the determination of stock prices.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

.The model is commonly applied to wages, in the market for labor.^ The same argument applies as long as the marginal disvalue of labor to you is less than the wage, so you end up working that number of hours for which the two are equal.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ The same relation applies at any other wage, so your marginal disvalue for labor curve is also your supply curve for labor , just as, in Chapter 4, your marginal value curve for a good was also your demand curve.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ Figure 4.4, “Demand and Supply in the Stock Market” applies the model of demand and supply to the determination of stock prices.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

The typical roles of supplier and consumer are reversed. .The suppliers are individuals, who try to sell their labor for the highest price.^ It could retain the monetary system we know to-day and it could supply the commodities to the consumers, not as a matter of right, but by selling them to them at a price .
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ And, the opportunity cost of selling that gasoline will be reflected in the demand and willingness to pay for it among competing buyers, along with the anticipated cost of replacing it with higher-priced wholesale supplies.
  • Gas Prices Fact or Fiction: A Primer on Supply and Demand - Tom Lehman - Mises Institute 9 January 2010 22:50 UTC mises.org [Source type: FILTERED WITH BAYES]

^ Our labor is something we are selling, not buying; an increase in its price (the wage rate) makes us richer not poorer, and so inclined to buy more leisure.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

.The consumers of labors are businesses, which try to buy the type of labor they need at the lowest price.^ As private individuals, men do, indeed, deliberately provide for their own future, and for that of their kith and kin: as the directors of businesses, they try to forecast the trend of demand.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ When the average level of prices in the economy increases, why do consumers, governments, business and foreigners purchase less?
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

^ They need to bring in money, and it's tough to agree and implement cuts on the scale required to affect the price.
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

.The equilibrium price for a certain type of labor is the wage.^ To lower their prices business would like to decrease their labor costs (wages), but they may not be able to because of the minimum wage laws.
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

^ Our labor is something we are selling, not buying; an increase in its price (the wage rate) makes us richer not poorer, and so inclined to buy more leisure.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ In equilibrium, the wage equals the marginal value of leisure (marginal disvalue of labor).
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

[3]
.A number of economists (for example Pierangelo Garegnani[4], Robert L. Vienneau[5], and Arrigo Opocher & Ian Steedman[6]), building on the work of Piero Sraffa, argue that that this model of the labor market, even given all its assumptions, is logically incoherent.^ It is important to note that this example violates the assumption of perfect competition in that there are a limited number of market participants.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Even if every university had a course in media literacy, but the 2/3’s of the country that doesn’t go to university … A: There’s lot of work going on in media literacy at all levels of education.
  • Joho the Blog » [berkman] Dan Gillmor on journalism supply and demand 9 January 2010 22:50 UTC www.hyperorg.com [Source type: FILTERED WITH BAYES]

^ Moreover, even a behavioral demand model would yield misleading results if it lacked a quality dimension; for example, a tradeoff of quantity for quality could be misinterpreted as a reduction in the number of teachers demanded in response to rising cost.
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

.Michael Anyadike-Danes and Wyne Godley [7] argue, based on simulation results, that little of the empirical work done with the textbook model constitutes a potentially falsifying test, and, consequently, empirical evidence hardly exists for that model.^ These textbook models are often combined to show the consequences of a single firm having both pure buyer power and pure seller power.
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

^ Sexton argues for theoretical and empirical use of simplified market power models in agriculture because they give insight into the allocative and distributional consequences of growing market power in the food system.
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

^ The result is offsetting implications for the setting of the nominal funds rate and, thus, monetary policy may be left with little work to do.
  • FRB: Speech, Meyer -- The New Economy Meets Supply and Demand -- June 6, 2000 9 January 2010 22:50 UTC www.federalreserve.gov [Source type: FILTERED WITH BAYES]

.Graham White [8] argues, partially on the basis of Sraffianism, that the policy of increased labor market flexibility, including the reduction of minimum wages, does not have an "intellectually coherent" argument in economic theory.^ In general the theory claims that where goods are traded in a market at a price where consumers demand more goods than firms are prepared to supply, this shortage will tend to increase the price of the goods.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ To lower their prices business would like to decrease their labor costs (wages), but they may not be able to because of the minimum wage laws.
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

^ However, the odds of our government, regardless of which party leads it, enacting coherant energy policy seem pretty long to me.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

.This criticism of the application of the model of supply and demand generalizes, particularly to all markets for factors of production.^ Market review - Platinum supply & demand .
  • Market review - Platinum supply & demand 9 January 2010 22:50 UTC www.angloplatinum.com [Source type: News]

^ Supply and Demand for an INDIVIDUAL product .
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

^ These markets are thus direct applications of the model of demand and supply.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

It also has implications for monetary theory[9] not drawn out here.
.In both classical and Keynesian economics, the money market is analyzed as a supply-and-demand system with interest rates being the price.^ It is classic Supply Side economics.
  • A Tale of Two Theories: Supply Side and Demand Side Economics 9 January 2010 22:50 UTC www.commondreams.org [Source type: News]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ Market review - Platinum supply & demand .
  • Market review - Platinum supply & demand 9 January 2010 22:50 UTC www.angloplatinum.com [Source type: News]

.The money supply may be a vertical supply curve, which the central bank of a country can influence through monetary policy.^ Vertical supply curve .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ A perfectly inelastic supply curve is vertical.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ So does a graph of broadband prices and quantities in different countries tell us about the supply curve or the demand curve?
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

.Some economists[10] argue that the money supply curve should be drawn as a horizontal line.^ The combined supply curve is a horizontal sum.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

^ A perfectly elastic supply curve is horizontal.
  • Principles of Microeconomics, 1st Canadian Edition | Cyberlecture 9 October 2009 21:13 UTC highered.mcgraw-hill.com [Source type: FILTERED WITH BAYES]

^ Each of the energy prices above can be drawn as a horizontal line across a supply curve.
  • Policy Implications of Greenhouse Warming: Mitigation, Adaptation, and the Science Base 9 October 2009 21:13 UTC www.nap.edu [Source type: Academic]

.The demand for money intersects with the money supply to determine the interest rate.^ If the interest rate is expected to increase for any reason (including, but not limited to, expected increases in inflation), bond prices are expected to fall, so the quantity demanded will decrease.
  • Shifts in Supply and Demand for Bonds | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

^ The New Economy Meets Supply and Demand I often draw the themes for my talks from the questions I hear about the intersection of the economic outlook and monetary policy.
  • FRB: Speech, Meyer -- The New Economy Meets Supply and Demand -- June 6, 2000 9 January 2010 22:50 UTC www.federalreserve.gov [Source type: FILTERED WITH BAYES]

^ So wages are a very important determinant of both the supply and demand of future teachers.
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

[11]

Empirical estimation

.Demand and supply relations in a market can be statistically estimated from price, quantity, and other data with sufficient information in the model.^ Conversely prices will tend to fall when the quantity supplied exceeds the quantity demanded.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ Any price and quantity combination is completely compatible with the laws of supply and demand.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

This can be done with simultaneous-equation methods of estimation in econometrics. .Such methods allow solving for the model-relevant "structural coefficients," the estimated algebraic counterparts of the theory.^ Patent literature refers to documents that are of great relevance to patents, such as patents, utility models, published patent applications, abstracts, and so forth.
  • Supply and Demand Analysis of Patent Translation 9 January 2010 22:50 UTC accurapid.com [Source type: Reference]

^ More specifically, the assessment addresses the following issues: How adequate are the present models and methods for estimating future levels of teacher supply, demand, and quality?
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

The Parameter identification problem is a common issue in "structural estimation." Typically, data on exogenous variables (that is, variables other than price and quantity, both of which are endogenous variables) are needed to perform such an estimation. .An alternative to "structural estimation" is reduced-form estimation, which regresses each of the endogenous variables on the respective exogenous variables.^ If she wants to find the structural demand parameters, she should include an exogenous variable that affects the supply function, but not the demand function.
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

Macroeconomic uses of demand and supply

.Demand and supply have also been generalized to explain macroeconomic variables in a market economy, including the quantity of total output and the general price level.^ The market price is the point at which demand meets supply.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ At what price are supply and demand in balance?
  • Supply and Demand 9 January 2010 22:50 UTC arnoldkling.com [Source type: General]

^ III. Price tends to the level at which demand is equal to supply.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

.The Aggregate Demand-Aggregate Supply model may be the most direct application of supply and demand to macroeconomics, but other macroeconomic models also use supply and demand.^ These markets are thus direct applications of the model of demand and supply.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

^ The price of a commodity is determined by the conditions of both supply and demand; and neither can logically be said to be the superior influence, though it may sometimes be convenient to concentrate our attention on one or other of them.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ It is one of the most fundamental economic models, ubiquitously used as a basic building block in a wide range of more detailed economic models and theories.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.Compared to microeconomic uses of demand and supply, different (and more controversial) theoretical considerations apply to such macroeconomic counterparts as aggregate demand and aggregate supply.^ Comparing things that are different and have different uses is silly.
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ But is this because their supply curves differ or their demand curves differ?
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

^ For, in the aggregate, supply is demand is supply.

.Demand and supply may also be used in macroeconomic theory to relate money supply to demand and interest rates.^ Causality in supply and demand theory is not that difficult.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ Parallel to the relation of Composite Supply is that of Composite Demand.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ Interest rates may be very steady.
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

Demand shortfalls

.A demand shortfall results from the actual demand for a given product being lower than the projected, or estimated, demand for that product.^ It is possible that the next generation of oncologists may practice fewer hours and may therefore have lower lifetime productivity than previous generations.
  • Future Supply and Demand for Oncologists : Challenges to Assuring Access to Oncology Services -- Erikson et al. 3 (2): 79 -- Journal of Oncology Practice 9 January 2010 22:50 UTC jop.ascopubs.org [Source type: Academic]

^ "However, economic conditions have been eroding housing market demand faster than supply is contracting with the result that listing prices continue to fall."
  • Supply and Demand - Altos Research Real Estate Insights 9 January 2010 22:50 UTC www.altosresearch.com [Source type: General]

^ Post Reply Tenoq Jul 1, 2007 - 7:16 PM Someone actually releases something with enough product to satisfy demand?
  • First Day iPhone Supply Exceeds Demand | Betanews 9 January 2010 22:50 UTC www.betanews.com [Source type: FILTERED WITH BAYES]

.Demand shortfalls are caused by demand overestimation in the planning of new products.^ New product introduction processes at many companies have been enhanced and the planning greatly improved to keep supply and demand better aligned as new products hit the market.

^ Demand planners at glove manufacturer Wells Lamont have put their finger on a way to bring new value to the company by leveraging technology that allows them to plan by exception.
  • Demand planning, business forecasting, supply chain planning, sales forecasting, sales and operations planning software 9 January 2010 22:50 UTC www.johngalt.com [Source type: General]

^ In order to grow spare capacity, the world each year must commission new capacity to compensate for decline and to accommodate increased demand: spare capacity growth = new annual production capacity - (annual decline + consumption growth) .
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

Demand overestimation is caused by optimism bias and/or strategic misrepresentation.

History

The power of supply and demand was understood to some extent by several early Muslim economists, such as Ibn Taymiyyah who illustrates:
.
"If desire for goods increases while its availability decreases, its price rises.^ As prices rise, demand decreases.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

^ Price and availability of substitute goods.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

^ As prices rise, quantity demanded increases.
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

.On the other hand, if availability of the good increases and the desire for it decreases, the price comes down."^ Price and availability of substitute goods.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

^ If a government imposes a tax on a good, thereby increasing the effecive price, how will this effect the quantity demanded?
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Demand curves are derived while holding constant: Income and tastes Income, tastes, and the price of other goods Tastes and the price of other goods Income, tastes, and the price of the good Answer: Income, tastes, and the price of other goods .
  • Economics - Supply And Demand Interview Question and Answers 9 January 2010 22:50 UTC www.gorecroot.com [Source type: General]

[12]
The phrase "supply and demand" was first used by James Denham-Steuart in his Inquiry into the Principles of Political Economy, published in 1767. Adam Smith used the phrase in his 1776 book The Wealth of Nations, and David Ricardo titled one chapter of his 1817 work Principles of Political Economy and Taxation "On the Influence of Demand and Supply on Price".[13]
.In The Wealth of Nations, Smith generally assumed that the supply price was fixed but that its "merit" (value) would decrease as its "scarcity" increased, in effect what was later called the law of demand.^ It would seem then that we might lay down quite generally that an increase in demand or a decrease in supply will raise the price while a decrease in demand or an increase in supply will lower it.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ Wealth sets the general level of demand.
  • Shifts in Supply and Demand for Bonds | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

^ The general laws of supply and demand hold good.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

.Ricardo, in Principles of Political Economy and Taxation, more rigorously laid down the idea of the assumptions that were used to build his ideas of supply and demand.^ An example: Supply and demand in a 6 person economy .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ In this, he more rigoursly laid down the idea of the assumptions that were used to build his ideas of supply and demand.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ David Ricardo in 1817 published the book Principles of Political Economy and Taxation in which the first idea of an economic model was proposed.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.Antoine Augustin Cournot first developed a mathematical model of supply and demand in his 1838 Researches on the Mathematical Principles of the Theory of Wealth.^ Causality in supply and demand theory is not that difficult.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ David Ricardo in 1817 published the book Principles of Political Economy and Taxation in which the first idea of an economic model was proposed.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ In general the theory claims that where goods are traded in a market at a price where consumers demand more goods than firms are prepared to supply, this shortage will tend to increase the price of the goods.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.During the late 19th century the marginalist school of thought emerged.^ During the late 19th century the marginalist school of thought emerged.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Since the late 19th century, the theory of supply and demand has mainly been unchanged.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.This field mainly was started by Stanley Jevons, Carl Menger, and Léon Walras.^ This field mainly was started by Carl Menger, and Lon Walras.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

.The key idea was that the price was set by the most expensive price, that is, the price at the margin.^ The key idea was that the price was set by the most expensive price, i.e.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The key for my students at this point, particularly when talking about what causes price and quantity changes, is knowing what kind of things will change each relationship and, most importantly, what kinds of things will *never* change the relationship.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ Most people recognize that crude oil is the key input in the production of gasoline products, and that the price of crude oil in international markets has been rising consistently for several years.
  • Gas Prices Fact or Fiction: A Primer on Supply and Demand - Tom Lehman - Mises Institute 9 January 2010 22:50 UTC mises.org [Source type: FILTERED WITH BAYES]

.This was a substantial change from Adam Smith's thoughts on determining the supply price.^ This was a substantial improvement over Adam Smith's thoughts on determining the supply price.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Before Adam Smith this apparatus of thought scarcely existed.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ The general interest in that topic was shared by the pioneers of economic thought, of whom, in Great Britain, Adam Smith was the most notable.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

.In his 1870 essay "On the Graphical Representation of Supply and Demand", Fleeming Jenkin drew for the first time the popular graphic of supply and demand which, through Marshall, eventually would turn into the most famous graphic in economics.^ It's the kind of argument that somebody would make if they dropped Econ 101 halfway through the semester: taking the most rudimentary of economic analysis tools and treating it like it holds the answers to everything.

^ Under the scenario of low supply and high demand, the shortage would be as much as 15.0 million visits.
  • Future Supply and Demand for Oncologists : Challenges to Assuring Access to Oncology Services -- Erikson et al. 3 (2): 79 -- Journal of Oncology Practice 9 January 2010 22:50 UTC jop.ascopubs.org [Source type: Academic]

^ To take into account long run demand destruction, only half of the supply demand gap is used for calculating the price increase.
  • The Oil Drum: Europe | Why oil costs over $120 per barrel 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

.The model was further developed and popularized by Alfred Marshall in the 1890 textbook Principles of Economics.^ This can be traced back to Alfred Marshall's 1890 textbook, Principles of Economics .
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ David Ricardo in 1817 published the book Principles of Political Economy and Taxation in which the first idea of an economic model was proposed.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ On one hand, models are useful in furthering the development of data bases.
  • Teacher Supply, Demand, and Quality: Policy Issues, Models, and Data Bases 9 January 2010 22:50 UTC www.nap.edu [Source type: FILTERED WITH BAYES]

[13] .Along with Léon Walras, Marshall looked at the equilibrium point where the two curves crossed.^ The point where these curves intersect is the equilibrium point .
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ The intersection of the two curves is the unique point at which there is neither a surplus (an excess of supply over demand), nor a shortage (an excess of demand over supply).
  • Supply and Demand - Wolfram Demonstrations Project 9 January 2010 22:50 UTC demonstrations.wolfram.com [Source type: FILTERED WITH BAYES]

^ Demand and supply can be graphed as curves - and the two curves meet at the equilibrium price and quantity.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

.They also began looking at the effect of markets on each other.^ They also began looking at the effect of markets on each other.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ Looking at components that have grown significantly and asking why they changed is an extremely important task in which I would invite you and others with expertise to join me.
  • Econbrowser: Supply and demand for judicial services 9 January 2010 22:50 UTC www.econbrowser.com [Source type: Original source]

^ In other words, market forces are only in effect when there is a general surplus of energy.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

Criticism

.At least two assumptions are necessary for the validity of the standard model: first, that supply and demand are independent; and second, that supply is "constrained by a fixed resource"; If these conditions do not hold, then the Marshallian model cannot be sustained.^ These markets are thus direct applications of the model of demand and supply.
  • Putting Demand and Supply to Work | Flat World Knowledge 9 January 2010 22:50 UTC www.flatworldknowledge.com [Source type: General]

^ Wool and mutton, for instance, we have described as an instance of Joint Supply; but, in so far as the proportions of wool and mutton can be varied, we can regard these things as constituting a Composite Demand for sheep.
  • Supply and Demand 9 January 2010 22:50 UTC www.gutenberg.org [Source type: Original source]

^ Our new AGGREGATE supply and AGGREGATE demand model looks similar to the supply and demand model, but they are NOT the same!
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

.Sraffa's critique focused on the inconsistency (except in implausible circumstances) of partial equilibrium analysis and the rationale for the upward-slope of the supply curve in a market for a produced consumption good[14].^ This is a "direct" relationship, and the supply curve has an upward slope.
  • Supply and Demand Curves - Understanding Price and Quantity in the Marketplace 9 January 2010 22:50 UTC www.mindtools.com [Source type: General]

^ The supply curve is upward-sloping, reflecting the law of supply.
  • Module Notes -- Supply and Demand 9 January 2010 22:50 UTC www.econweb.com [Source type: General]

^ The producer surplus for a two producer supply curve.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

The notability of Sraffa's critique is also demonstrated by Paul A. Samuelson's comments and engagements with it over many years, for example:
"What a cleaned-up version of Sraffa (1926) establishes is how nearly empty are all of Marshall's partial equilibrium boxes. .To a logical purist of Wittgenstein and Sraffa class, the Marshallian partial equilibrium box of constant cost is even more empty than the box of increasing cost."^ Achieving Best Practice Performance In Automotive Parts Distribution Globalization and structural issues have caused the automotive market to become more competitive than ever, with pressure to deliver increasing levels of service at lower costs.
  • Supply Chain Demand Planning | ciber.com 9 January 2010 22:50 UTC www.ciber.com [Source type: FILTERED WITH BAYES]

^ In general the theory claims that where goods are traded in a market at a price where consumers demand more goods than firms are prepared to supply, this shortage will tend to increase the price of the goods.
  • Supply And Demand 9 January 2010 22:50 UTC www.nowsell.com [Source type: FILTERED WITH BAYES]

^ That means that if you produced an additional unit, the value to you of the good would be more than the cost to you of the labor used to produce it, so you would be better off producing it.
  • D. Friedman, Price Theory: Chapter 5: Production 9 October 2009 21:13 UTC www.daviddfriedman.com [Source type: FILTERED WITH BAYES]

[15].
.Aggregate excess demand in a market is the difference between the quantity demanded and the quantity supplied as a function of price.^ Instead, prices are a function of relative supply and demand conditions.
  • Gas Prices Fact or Fiction: A Primer on Supply and Demand - Tom Lehman - Mises Institute 9 January 2010 22:50 UTC mises.org [Source type: FILTERED WITH BAYES]

^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ Any price and quantity combination is completely compatible with the laws of supply and demand.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

.In the model with an upward-sloping supply curve and downward-sloping demand curve, the aggregate excess demand function only intersects the axis at one point, namely, at the point where the supply and demand curves intersect.^ Ceteris paribus is used to explain why demand curves slope downward and supply curves slope upward.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

^ But is this because their supply curves differ or their demand curves differ?
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

^ One statement is that supply and demand have met.
  • TheMoneyIllusion » Why is supply and demand so confusing? 9 January 2010 22:50 UTC blogsandwikis.bentley.edu [Source type: Original source]

.The Sonnenschein-Mantel-Debreu theorem shows that the standard model cannot be rigorously derived in general from the theory of general equilibrium[16].^ That is sad and it too often shows in how the theories are operated and applied to modeling.
  • The Oil Drum | The Economics of Oil, Part I: Supply and Demand Curves 9 January 2010 22:50 UTC www.theoildrum.com [Source type: FILTERED WITH BAYES]

^ Hypothetical Derived Demand To graphically illustrate profit maximization and the resource allocation implications of monopsony, the traditional monopsony model shows a downward sloping derived demand curve (e.g.
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

^ As they showed, consumers' surplus can be measured in a factor market as the area between the appropriate partial-equilibrium derived demand curve and the general equilibrium demand curve 6 .
  • Monopsony and the All-or-Nothing Supply Curve: Putting the Squeeze on Suppliers 9 October 2009 21:13 UTC www.auburn.edu [Source type: Academic]

.The model of prices being determined by supply and demand assume perfect competition.^ Supply, demand, and the price of oil .
  • Econbrowser: Supply, demand, and the price of oil 9 January 2010 22:50 UTC www.econbrowser.com [Source type: General]

^ Prices and quantities are determined by both supply and demand.
  • Why Supply and Demand Are Hard to Measure - Freakonomics Blog - NYTimes.com 9 January 2010 22:50 UTC freakonomics.blogs.nytimes.com [Source type: General]

^ We have already discussed the Supply and Demand model to determine individual prices and quantities.
  • Aggregate Supply / Aggregate Demand Model 9 January 2010 22:50 UTC www.harpercollege.edu [Source type: FILTERED WITH BAYES]

But:
"economists have no adequate model of how individuals and firms adjust prices in a competitive model. If all participants are price-takers by definition, then the actor who adjusts prices to eliminate excess demand is not specified"[17].

See also

References

  1. ^ Note that unlike most graphs, supply & demand curves are plotted with the independent variable (price) on the vertical axis and the dependent variable (quantity supplied or demanded) on the horizontal axis.
  2. ^ "Marginal Utility and Demand". http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=marginal+utility+and+demand. Retrieved 2007-02-09. 
  3. ^ Kibbe, Matthew B.. "The Minimum Wage: Washington's Perennial Myth". Cato Institute. http://www.cato.org/pubs/pas/pa106.html. Retrieved 2007-02-09. 
  4. ^ P. Garegnani, "Heterogeneous Capital, the Production Function and the Theory of Distribution", Review of Economic Studies, V. 37, N. 3 (Jul. 1970): 407-436
  5. ^ Robert L. Vienneau, "On Labour Demand and Equilibria of the Firm", Manchester School, V. 73, N. 5 (Sep. 2005): 612-619
  6. ^ Arrigo Opocher and Ian Steedman, "Input Price-Input Quantity Relations and the Numeraire", Cambridge Journal of Economics, V. 3 (2009): 937-948
  7. ^ Michael Anyadike-Danes and Wyne Godley, "Real Wages and Employment: A Sceptical View of Some Recent Empirical Work", Machester School, V. 62, N. 2 (Jun. 1989): 172-187
  8. ^ Graham White, "The Poverty of Conventional Economic Wisdom and the Search for Alternative Economic and Social Policies", The Drawing Board: An Australian Review of Public Affairs, V. 2, N. 2 (Nov. 2001): 67-87
  9. ^ Colin Rogers, Money, Interest and Capital: A Study in the Foundations of Monetary Theory, Cambridge University Press, 1989
  10. ^ Basij J. Moore, Horizontalists and Verticalists: The Macroeconomics of Credit Money, Cambridge University Press, 1988
  11. ^ Ritter, Lawrence S.authorlink1 = Lawrence S. Ritter; Silber, William L.; Udell, Gregory F. (2000). Principles of Money, Banking, and Financial Markets (10th edition ed.). Addison-Wesley, Menlo Park C. pp. 431-438,465-476. ISBN 0-321-37557-2. 
  12. ^ Hosseini, Hamid S. (2003). "Contributions of Medieval Muslim Scholars to the History of Economics and their Impact: A Refutation of the Schumpeterian Great Gap". in Biddle, Jeff E.; Davis, Jon B.; Samuels, Warren J.. A Companion to the History of Economic Thought. Malden, MA: Blackwell. pp. 28–45 [28 & 38]. doi:10.1002/9780470999059.ch3. ISBN 0631225730. 
  13. ^ a b Humphrey, Thomas M. (March/April 1992). "Marshallian Cross Diagrams and Their Uses before Alfred Marshall: The Origins of Supply and Demand Geometry" ( – Scholar search). Economic Review. http://www.richmondfed.org/publications/economic_research/economic_review/pdfs/er780201.pdf,.  Federal Reserve Bank of Richmond.
  14. ^ Avi J. Cohen, "'The Laws of Returns Under Competitive Conditions': Progress in Microeconomics Since Sraffa (1926)?", Eastern Economic Journal, V. 9, N. 3 (Jul.-Sep.): 1983)
  15. ^ Paul A. Samuelson, "Reply" in Critical Essays on Piero Sraffa's Legacy in Economics (edited by H. D. Kurz) Cambridge University Press, 2000
  16. ^ Alan Kirman, "The Intrinsic Limits of Modern Economic Theory: The Emperor has No Clothes", The Economic Journal, V. 99, N. 395, Supplement: Conference Papers (1989): pp. 126-139
  17. ^ Alan P. Kirman, "Whom or What Does the Representative Individual Represent?" Journal of Economic Perspectives, V. 6, N. 2 (Spring 1992): pp. 117-136

External links


Simple English

at each price (demand). The graph shows an increase in demand from D1 to D2, along with a consequent increase in price and quantity sold of the product.]]

Supply and demand is a model of microeconomics. It looks at how a price is formed. This is done because producers and consumers interact with each other. This will fix the price for a certain type of good. In Perfect competition the quantity demanded (demand) and the quantity supplied will be equal. This will fix the price. There will be economic equilibrium.

When there is more supply, this will cause prices to fall because people will not want to pay more for items that can be found easily. When there is more demand, prices will go up because many people want to buy the same item but there is not enough supply for it.

When demands for new goods and services go up, new markets come into being. The greater the demand, the faster this happens. This greater number of providers makes the supply go up, which forces the price down toward the cost of production and distribution.

It was Alfred Marshall who first described the model.

Other websites



Citable sentences

Up to date as of December 21, 2010

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