Chapter 3 - Demand, supply, and market equilibrium. This chapter provides an introduction to demand and supply concepts. Both demand and supply are defined and illustrated; determinants of demand and supply are listed and explained. The concept of equilibrium and the effects of changes in demand and supply on equilibrium price and quantity are explained and illustrated. The chapter also includes brief discussions of efficiency (productive and allocative) and price controls (floors and ceilings). | Chapter 3 Demand, Supply, and Market Equilibrium Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. This chapter provides an introduction to demand and supply concepts. Both demand and supply are defined and illustrated; determinants of demand and supply are listed and explained. The concept of equilibrium and the effects of changes in demand and supply on equilibrium price and quantity are explained and illustrated. The chapter also includes brief discussions of efficiency (productive and allocative) and price controls (floors and ceilings). In the Last Word, you can read how creation of a legal market for human organs could reduce the shortages of kidneys, lungs, and other needed organs available for transplant. Markets Interaction between buyers and sellers Markets may be Local National International Price is discovered in the interactions of buyers and sellers LO1 In this . | Chapter 3 Demand, Supply, and Market Equilibrium Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. This chapter provides an introduction to demand and supply concepts. Both demand and supply are defined and illustrated; determinants of demand and supply are listed and explained. The concept of equilibrium and the effects of changes in demand and supply on equilibrium price and quantity are explained and illustrated. The chapter also includes brief discussions of efficiency (productive and allocative) and price controls (floors and ceilings). In the Last Word, you can read how creation of a legal market for human organs could reduce the shortages of kidneys, lungs, and other needed organs available for transplant. Markets Interaction between buyers and sellers Markets may be Local National International Price is discovered in the interactions of buyers and sellers LO1 In this chapter, the focus is on markets that are competitive. This requires large numbers of buyers and sellers acting independently. An example of a local market is the farmer’s market that brings together buyers and sellers of produce in the summer. An example of a national market is the US real estate market and the New York Stock Exchange is an international market. Demand Demand Demand schedule or demand curve Amount consumers are willing and able to purchase at a given price Other things equal Individual demand Market demand LO2 To be part of the demand for a good, consumers have to be willing and able to purchase the good. When deriving demand, we are assuming that the only factor that causes consumers to buy more or less is the price of the good. It is assumed that all other factors that influence the amount that consumers will buy are constant. Market demand is derived by summing the individuals’ demand curves. Law of Demand Law of demand Other things equal, as price falls, the .
