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Lecture

Market Interaction

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Department
Political Science
Course
POL371H1
Professor
Bathelt
Semester
Winter

Description
POL371 Lec 3 Jan 25Market Interaction1Market interaction and spatial equilibrium slide 2Neoclassical economics say that market signals automatically create a balance of interestsDue to a change in production conditions products can be produced at a much better price Supply curve gets shifted to the rightMean for the same price more producers are willing to produce moreIf the demand curve has not changed then an adjustment will take place According to neoclassical economics a new equilibrium will emerge Different situation in a planned economy You have a demand curve but no supply curve because supply is predetermined by the stateIncredibly difficult to measure the real supply or real demand curves Very easy to fuck this up In the former socialist economies the production decisions and price decisions were also politically drivenGeneral products food for instance were offered at a much lower than market price and thus the demand was much higher than the s
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