ECO 108 Lecture Notes - Lecture 2: Economic Equilibrium

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7 Feb 2017
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Supply
Law of supply: When price goes up, quantity supplied goes up
o Can slope up or down but a majority of supply curves slope upwards
o Quantity supplied is a number that changes when price changes
Movement along supply curve
o Supply is a function
A change in supply movement of curve occurs when something
other than price changes
Equilibrium price: Quantity demanded is equivalent to the quantity supplied
when a good is sold at this price
o Price of feed corn goes up: D unchanged (buyers won’t ask about price of
feed), S decreases, P increases, Q decreases
o Pork chops are good for you: D increases, S unchanged, P increases, Q
increases
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