for nordin"s student

1. Demand, Supply and Equilibrium INSPIRING CREATIVE AND INNOVATIVE MINDS

14. Price Quantity $ Supply Curve 1 2 3 4 5 200 300 400 500 600 The Supply Curve

16. Market Equilibrium (E) is where: Qty demanded = Qty supplied (intersection of demand and supply curves) the market is cleared (no shortages or surpluses) Price (EP) is stable

17. Market Disequilibrium = where Qty Demanded is NOT EQUAL to Qty Supplied. Types: 1. Market Shortage: where Qty demanded > Qty supplied 2. Market Surplus (oversupply): where Qty supplied > Qty demanded

20. Changes in Demand Certain factors (other than price changes) affect the absolute level of demand. These factors are called Conditions of Demand. Changes to the Conditions of Demand cause changes in demand and this results in shifts of the Demand curve.

22. EQ1 EQ A Decrease in Demand The entire demand curve shifts to the Left Caused by a factor other than price Price Qty S D D1 E E1 EP EP1

24. Changes in Supply Certain factors (other than price changes) affect the absolute level of supply. These factors are called CONDITIONS OF SUPPLY and they result in shifts of the supply curve (not movements along it).

25. Price Qty S D S1 E E1 EP EP1 EQ EQ1 An Increase in Supply Supply curve shifts to the right.