Changes in market equilibrium, Microeconomics

Changes in Market Equilibrium

Equilibrium prices are known by the associate level of supply and demand.

Supply and demand are decided by particular values of supply & demand determining variables.

Alteration in any one or combination of these variables can result in a change in the equilibrium price and/or quantity.

247_market equilibrium.png

Raw material prices fall 

– S moves to S’

– Surplus @ P1 of Q1, Q2

– Equilibrium @ P3, Q3

1937_market equilibrium1.png

Raw material prices increases

– S moves to S’

– Shortage @ P1 of Q1, Q2

– Equilibrium @ P3, Q3

108_market equilibrium2.png

Income Rises

P D D’ S

– Demand moves to D’ Shortage @ P1 of Q1, Q2

– Equilibrium @ P3, Q3

2042_market equilibrium3.png

Income Reduces

– Demand moves to D’

– Surplus @ P1 of Q1, Q2

– Equilibrium @ P3, Q3 

1046_market equilibrium4.png

Income Rises & raw material prices fall

– The increase in D is more than the increase in S

– Equilibrium price and quantity rise to P2, Q2

719_market equilibrium5.png

Income Increases & raw material prices decreases 

– The rise in D is less than the increase in S

– Equilibrium price reduce to P2and quantity rise to Q2

1010_market equilibrium6.png

Income Decreases & raw material prices decreases 

D’

– The decrease in D is more than the increase in S

– Equilibrium price and quantity lowers to P2 Q2

545_market equilibrium7.png

Income decreases & raw material prices decreases 

– The decrease in D is less than the rise in S

– Equilibrium price reduce  to P2 and quantity increase to Q2

Posted Date: 7/24/2012 8:12:37 AM | Location : United States







Related Discussions:- Changes in market equilibrium, Assignment Help, Ask Question on Changes in market equilibrium, Get Answer, Expert's Help, Changes in market equilibrium Discussions

Write discussion on Changes in market equilibrium
Your posts are moderated
Related Questions
What is the difference between decreasing marginal returns and negative marginal returns?

define statistics in plural and singular sense


Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

what are the values of real money supply and the current price level

the demand and supply functions for goods are given by demand:Pd=50-3Qds and supply:Ps=14=1.5Qs. where p is the price of a pair of jeans, Q is the number of pairs of jeans a) calc

What are subsidies?  Almost in all market systems, government plays its role to stabilize the price of certain commodities, which are of public interest like medicines and edib

Resilience in Addition to Strength: The BOP has been in overall surplus since 1996-97 with forex reserves rising, on an average, by $8.50 billion per annum during 1996-97 to 2

assume you are selling a product and when your price is decreased by 29% your quantity demanded increases by 55%. What is your price elasticity of demand?

net preparation ranjna baghel