Chapter 3 - Supply and demand. After studying this chapter you will be able to: Define and explain demand in a product or service market; define and explain supply; determine the equilibrium point in the market for a specific good, given data on supply and demand at different price levels; understand what causes shifts in demand and supply; understand how price ceilings cause shortages; understand how price floors cause surpluses. | Chapter 3 Supply and Demand 3-1 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Define and explain demand in a product or service market Define and explain supply Determine the equilibrium point in the market for a specific good, given data on supply and demand at different price levels 3-2 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Understand what causes shifts in demand and supply Understand how price ceilings cause shortages Understand how price floors cause surpluses 3-3 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The schedule of quantities of a good or service that people are willing and able to buy at different prices Sometimes a schedule is also called a table Demand Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 3-4 Hypothetical Daily Demand for Coach Seats on Round-Trip Weekly Flights between Denver and Chicago Table 1 Price QD $500 1,000 450 3,000 400 7,000 350 12,000 300 19,000 250 30,000 200 45,000 150 57,000 100 67,000 3-5 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Hypothetical Daily Demand for Coach Seats on Round-Trip Weekly Flights between Denver and Chicago Table 1 Price QD $500 1,000 450 3,000 400 7,000 350 12,000 300 19,000 250 30,000 200 45,000 150 57,000 100 67,000 3-6 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Hypothetical Daily Demand for Coach Seats on Round-Trip Weekly Flights between Denver and Chicago Table 1 Price QD $500 1,000 450 3,000 400 7,000 350 12,000 300 19,000 250 30,000 200 45,000 150 57,000 100 67,000 3-7 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Hypothetical Daily Demand for Coach Seats on Round-Trip Weekly Flights between Denver and Chicago Table 1 Price QD $500 1,000 450 3,000 400 7,000 350 12,000 300 19,000 250 30,000 200 45,000 150 57,000 100 67,000 3-8 Copyright 2002 by The McGraw-Hill . | Chapter 3 Supply and Demand 3-1 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Define and explain demand in a product or service market Define and explain supply Determine the equilibrium point in the market for a specific good, given data on supply and demand at different price levels 3-2 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Understand what causes shifts in demand and supply Understand how price ceilings cause shortages Understand how price floors cause surpluses 3-3 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The schedule of quantities of a good or service that people are willing and able to buy at different prices Sometimes a schedule is also called a table Demand Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 3-4 Hypothetical Daily Demand for Coach Seats on Round-Trip Weekly Flights between Denver and Chicago Table 1 Price QD $500 .
