TAILIEUCHUNG - Lecture Microeconomics: Chapter 2 - Besanko, Braeutigam

Chapter 2 - Demand and supply analysis. This chapter presents the following content: Motivation – . corn markets, competitive markets defined, the market demand curve, the market supply curve, equilibrium, characterizing demand and supply – elasticity, back of the envelope techniques. | Chapter 2 1 Demand and Supply Analysis Copyright (c)2014 John Wiley & Sons, Inc. 1 2 Chapter Two Overview Motivation – . corn markets Competitive Markets Defined The Market Demand Curve The Market Supply Curve Equilibrium 6. Characterizing Demand and Supply – Elasticity 7. Back of the Envelope Techniques Chapter Two Copyright (c)2014 John Wiley & Sons, Inc. 3 Motivations Example: . Corn Market Historical price: $ per bushel Why do prices vary so much? Changes in Supply and Demand conditions affects pattern of prices Prices fell below $ per bushel 2003-2004: 2004-2005: Prices rose to $ per bushel Chapter Two 2006-2008: Prices rose above $ per bushel 2008-2009: Prices fell to $ per bushel Copyright (c)2014 John Wiley & Sons, Inc. 4 Motivations Example: . Corn Market Chapter Two 2002-2003 Decrease in supply due to drought in the corn-growing states 2004-2005 Unexpectedly large . corn crops 2006-2008 Changes in . government policy Bubble years Increase .

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