TAILIEUCHUNG - Lecture Economics (18th edition): Chapter 3 - McConnell, Brue, Flynn's

Chapter 3 - Demand, supply, and market equilibrium. The model of supply and demand is the economics profession’s greatest contribution to human understanding because it explains the operation of the markets on which we depend for nearly everything that we eat, drink, or consume. The model is so powerful and so widely used that to many people it is economics. This chapter explains how the model works and how it can explain both the quantities that are bought and sold in markets as well as the prices at which they trade. | Demand, Supply, and Market Equilibrium Chapter 3 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Objectives Demand and its determinants Supply and its determinants Supply, demand, & market equilibrium Changes in supply and demand Government-set prices 3- A Market Interaction between buyers and sellers Buyers demand goods Sellers supply goods Assumptions Standardized good Competitive market 3- Demand Schedule or curve Amount consumers willing and able to purchase at a given price Other things equal Individual demand Market demand 3- Law of Demand Other things equal, as price falls quantity demanded rises Explanations: Diminishing marginal utility Income effect Substitution effect 3- Individual Demand 6 5 4 3 2 1 0 10 20 30 40 50 60 70 80 Quantity Demanded (bushels per week) Price (per bushel) P Qd $5 4 3 2 1 10 20 35 55 80 P Q D 3- Determinants of Demand Factors that shift the demand curve Cause more or less to be bought at any possible price Increase or decrease in demand Tastes Number of buyers 3- Determinants of Demand Income Normal goods Inferior goods Price of related goods Substitute good Complementary good Unrelated goods Consumer expectations 3- Individual Demand 6 5 4 3 2 1 0 Quantity Demanded (bushels per week) Price (per bushel) P Qd $5 4 3 2 1 10 20 35 55 80 P Q D1 2 4 6 8 10 12 14 16 18 D2 D3 3- Individual Demand 6 5 4 3 2 1 0 Quantity Demanded (bushels per week) Price (per bushel) P Qd $5 4 3 2 1 10 20 35 55 80 P Q D1 2 4 6 8 10 12 14 16 18 D2 D3 Change in Demand Change in Quantity Demanded 3- Supply Schedule or curve Amount producers willing and able to sell at a given price Individual supply Market supply 3- Law of Supply Other things equal, as price rises the quantity supplied rises Explanations: Revenue implications Marginal cost 3- Individual Supply 6 5 4 3 2 1 0 Quantity Supplied (bushels per week) Price (per bushel) P Qs $5 4 3 2 1 60 50 35 20 5 P Q S1

• Kinh tế học
• Lecture Microeconomics
• Economic problem
• Economic principles
• Economic policies
• Demand curve
• Market equilibrium
• Microeconomics theory
• Microeconomics applications
• Kinh tế vĩ mô
• Scope of microeconomic theory
• Normative analyses
• Demand curves
• Supply curves
• Consumer choice
• Theory of consumer choice
• Consumption choices
• Substitution effects
• Consumer choice theory
• Excise subsidies
• Economic efficiency
• Competitive equilibrium
• Relating output to inputs
• Empirical estimation
• Cost of production
• Shortrun cost
• Profit maximization
• Perfectly competitive markets
• Competitive model
• Excise taxation
• Monopolist’s demand
• Marginal revenue curves
• Product pricing
• Monopoly power
• Monopolistic competition
• Cournot model
• Game theory
• Economics of information
• Noncompetitive market models
• Iterated dominance
• Input demand curve
• Leisure choice
• Wage rates
• Minimum wage
• Hidden costs
• General equilibrium analysis
• Public goods