ECON101 Lecture Notes - Lecture 5: Economic Equilibrium, Situation Two, Root Mean Square
purplechimpanzee495 and 51 others unlocked
79
ECON101 Full Course Notes
Verified Note
79 documents
Document Summary
Theories of demand and supply: supply, market equilibrium. Sc= f (pc, cf, poc, efp, fn, t) Price of other related commodities: substitutes in production. Situation 1: the price of corn increases: firms producing wheat will provide corn, producers supply less wheat at each price, supply of what shifts to the left (decrease in supply) Situation 2: producers supply more wheat at each price, supply of wheat shifts to the right (increase in supply of wheat) Price of skies, ski boots: producers supply more skit boots @ each price, supply of ski boots shifts to the right (increase in supply of ski boots) Producers supply less ski boots @ each price. Supply of ski boots shifts to the left (decrease in supply of ski boots) Expected future prices (efp: if rms in the industry expect the price of the commodity to fall or decline in the future, they will supply more now since the pro t is higher.