2
SUPPLY AND DEMAND I: HOW MARKETS WORK
Copyright © 2006 Thomson Learning
4
4
The Market Forces of
Supply and Demand
Copyright © 2006 Thomson Learning
Figure 1 Catherine’s Demand Schedule and Demand
Curve
Copyright © 2004 South-Western
Figure 3 Shifts in the Demand Curve
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
Quantity of
Ice-Cream Cones
Increase
in demand
Decrease
in demand
Demand curve, D3
Demand
curve, D1
Demand
curve, D2
0
Table 1 Variables That Influence Buyers
Copyright©2004 South-Western
Figure 5 Ben’s Supply Schedule and Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Figure 7 Shifts in the Supply Curve
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
Quantity of
Ice-Cream Cones
0
Increase
in supply
Decrease
in supply
Supply curve, S3
curve,
Supply
S1
Supply
curve, S2
Table 2 Variables That Influence Sellers
Copyright©2004 South-Western
Figure 8 The Equilibrium of Supply and Demand
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 1 2 3 4 5 6 7 8 9 10 11 12
Quantity of Ice-Cream Cones
13
Equilibrium
quantity
Equilibrium price Equilibrium
Supply
Demand
€ 2.00
Figure 9 Markets Not in Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0
Supply
Demand
(a) Excess Supply
Quantity
demanded
Quantity
supplied
Surplus
Quantity of
Ice-Cream
Cones
4
€ 2.50
10
2.00
7
Copyright © 2006 Thomson Learning
Equilibrium
• Surplus
• When price > equilibrium price, then quantity
supplied > quantity demanded.
• There is excess supply or a surplus.
• Suppliers will lower the price to increase sales, thereby
moving toward equilibrium.
Figure 10 How an Increase in Demand Affects the
Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 Quantity of
Ice-Cream Cones
Supply
Initial
equilibrium
D
D
3. . . . and a higher
quantity sold.
2. . . . resulting
in a higher
price . . .
1. Hot weather increases
the demand for ice cream . . .
2.00
7
New equilibrium
€ 2.50
10
Figure 11 How a Decrease in Supply Affects the
Equilibrium
Copyright©2003 Southwestern/Thomson Learning
Price of
Ice-Cream
Cone
0 Quantity of
Ice-Cream Cones
Demand
New
equilibrium
Initial equilibrium
S1
S2
2. . . . resulting
in a higher
price of ice
cream . . .
1. An increase in the
price of sugar reduces
the supply of ice cream. . .
3. . . . and a lower
quantity sold.
2.00
7
€ 2.50
4
Table 4 What Happens to Price and Quantity When Supply
or Demand Shifts?
Copyright©2004 South-Western

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capítulo 04 do livro de introdução à economia do mankiw. ppt

  • 1. 2 SUPPLY AND DEMAND I: HOW MARKETS WORK
  • 2. Copyright © 2006 Thomson Learning 4 4 The Market Forces of Supply and Demand
  • 3. Copyright © 2006 Thomson Learning Figure 1 Catherine’s Demand Schedule and Demand Curve Copyright © 2004 South-Western
  • 4. Figure 3 Shifts in the Demand Curve Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone Quantity of Ice-Cream Cones Increase in demand Decrease in demand Demand curve, D3 Demand curve, D1 Demand curve, D2 0
  • 5. Table 1 Variables That Influence Buyers Copyright©2004 South-Western
  • 6. Figure 5 Ben’s Supply Schedule and Supply Curve Copyright©2003 Southwestern/Thomson Learning
  • 7. Figure 7 Shifts in the Supply Curve Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone Quantity of Ice-Cream Cones 0 Increase in supply Decrease in supply Supply curve, S3 curve, Supply S1 Supply curve, S2
  • 8. Table 2 Variables That Influence Sellers Copyright©2004 South-Western
  • 9. Figure 8 The Equilibrium of Supply and Demand Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone 0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity of Ice-Cream Cones 13 Equilibrium quantity Equilibrium price Equilibrium Supply Demand € 2.00
  • 10. Figure 9 Markets Not in Equilibrium Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone 0 Supply Demand (a) Excess Supply Quantity demanded Quantity supplied Surplus Quantity of Ice-Cream Cones 4 € 2.50 10 2.00 7
  • 11. Copyright © 2006 Thomson Learning Equilibrium • Surplus • When price > equilibrium price, then quantity supplied > quantity demanded. • There is excess supply or a surplus. • Suppliers will lower the price to increase sales, thereby moving toward equilibrium.
  • 12. Figure 10 How an Increase in Demand Affects the Equilibrium Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone 0 Quantity of Ice-Cream Cones Supply Initial equilibrium D D 3. . . . and a higher quantity sold. 2. . . . resulting in a higher price . . . 1. Hot weather increases the demand for ice cream . . . 2.00 7 New equilibrium € 2.50 10
  • 13. Figure 11 How a Decrease in Supply Affects the Equilibrium Copyright©2003 Southwestern/Thomson Learning Price of Ice-Cream Cone 0 Quantity of Ice-Cream Cones Demand New equilibrium Initial equilibrium S1 S2 2. . . . resulting in a higher price of ice cream . . . 1. An increase in the price of sugar reduces the supply of ice cream. . . 3. . . . and a lower quantity sold. 2.00 7 € 2.50 4
  • 14. Table 4 What Happens to Price and Quantity When Supply or Demand Shifts? Copyright©2004 South-Western