Tsinghua_2005MBA_Lecture_02(Market Demand and Supply).pptVIP

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Tsinghua_2005MBA_Lecture_02(Market Demand and Supply).ppt

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Tsinghua_2005MBA_Lecture_02(Market Demand and Supply)

Chapter 1 Lecture 2 Market Supply and Demand Topics to Be Discussed Supply and Demand The Market Mechanism Changes in Market Equilibrium Elasticities of Supply and Demand Short-Run Versus Long-Run Elasticities Topics to Be Discussed Understanding and Predicting the Effects of Changing Market Conditions Effects of Government Intervention--Price Controls Introduction Applications of Supply and Demand Analysis Understanding and predicting how world economic conditions affect market price and production Analyzing the impact of government price controls, minimum wages, price supports, and production incentives Analyzing how taxes, subsidies, and import restrictions affect consumers and producers Wants Supply and Demand Supply and Demand Supply and Demand Supply and Demand Supply and Demand Non-price Determining Variables of Demand Income Consumer Tastes Price of Related Goods Substitutes Complements Supply and Demand Income Increases At P1, produce Q2 At P2, produce Q1 Demand Curve shifts right More purchased at any price on D’ than on D Shifts in Supply and Demand Demand - A Review Demand is determined by non-price demand-determining variables, such as, income, price of related goods, and tastes. Changes in demand are shown by shifting the entire demand curve. Changes in quantity demanded are shown by movements along the demand curve. Supply and Demand Supply and Demand Supply and Demand Supply and Demand Supply and Demand Supply and Demand Non-price Determining Variables of Supply Costs of Production Labor Capital Raw Materials Supply and Demand The cost of raw materials falls At P1, produce Q2 At P2, produce Q1 Supply curve shifts right to S’ More produced at any price on S’ than on S Supply and Demand Supply - A Review Supply is determined by non-price supply-determining variables as such as the cost of labor, capital, and raw materials. Changes in supply are shown by shifting the entire supply curve. Supply and Demand Supply - A Review Changes in quantity supp