Changes in market equilibrium, Microeconomics

Assignment Help:

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


Related Discussions:- Changes in market equilibrium

Markets, Syndicated and organized oligopoly

Syndicated and organized oligopoly

Supply and demand, Explain the meaning of the statement "coffee and tea are...

Explain the meaning of the statement "coffee and tea are close substitutes".

Determine the efficient amount of refrigerant, The marginal benefit of a re...

The marginal benefit of a refrigerant in a production process (the producer's willingness to pay for its use) is 100-5Q.  The marginal damage from the use of the refrigerant on the

Supply of labour, what is the influence of an increase of migrants on the m...

what is the influence of an increase of migrants on the market supply labour

Monopoly, how is monopoly different from opligopoly

how is monopoly different from opligopoly

Bandwagon effect - network externalities, The Bandwagon Effect - This i...

The Bandwagon Effect - This is desire to be in style, to have a commodity because almost everyone else has it, or to indulge in it. - This is major objective of marketing an

The market system, why is normal rate of return on capital included in the ...

why is normal rate of return on capital included in the total cost and what implication does it have

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd