Decrease in demand - effect on equilibrium price, Managerial Economics

Decrease in Demand

1469_decrease in demand.png

At the initial equilibrium price P1, quantity demanded falls from q1 to qd.  But the quantity supplied is still q1 at this price.  Hence, this creates excess of supply over demand, and this causes price to fall to a new equilibrium level P2 and quantity to  fall to a new equilibrium level q2.

Posted Date: 11/27/2012 6:18:35 AM | Location : United States







Related Discussions:- Decrease in demand - effect on equilibrium price, Assignment Help, Ask Question on Decrease in demand - effect on equilibrium price, Get Answer, Expert's Help, Decrease in demand - effect on equilibrium price Discussions

Write discussion on Decrease in demand - effect on equilibrium price
Your posts are moderated
Related Questions
The concept of point elasticity is applicable where change in price and the resulting change in quantity are infinite or small. Though, where change in price and consequent hunger

PRINCIPLES OF AN OPTIMAL TAX  SYSTEM When taxes are imposed certain conditions must be fulfilled.  These conditions are known as Principles or canons of taxation. According to

Q. What is Transport and Storage Economies? As the output increases, unit cost of transportation of raw materials, intermediate products and finished products fall. This is for

what is the importance of demand forecasting to managers

Factors influencing the supply of a commodity a)         Own Price of the commodity There is a direct relationship between quantity supplied and the price so that the hig


What are terms included in oligopoly? Oligopoly includes: • The meaning of oligopoly, and why it arises • Collusion • Game theory, particularly the concept of the pris

Demand Function for Money In the Keynesian analysis , the demand for money is a function of the level of income and the rate of interest. According to Milton Friedman, the dema

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

is the sales maximization applicable