Market equilibrium D1(q) Market Market S-1(@)I demand supply s1(q)=(-c+q)d a-c b+d D-1(g)=(a-g)/b k ad+bc q q b+d
Market Equilibrium q D-1 (q), S-1 (q) D-1 (q) = (a-q)/b Market demand Market supply S-1 (q) = (-c+q)/d p a c b d * = − + b d ad bc q * + + =
Market equilibrium ◆ Two special cases: quantity supplied is fixed, independent of the market price, and Quantity supplied is extremely sensitive to the market price
Market Equilibrium ◆Two special cases: ⚫quantity supplied is fixed, independent of the market price, and ⚫quantity supplied is extremely sensitive to the market price
Market equilibrium Market quantity supplied is fixed, independent of price. S(p)=C+dp, so d=0 andS(p)≡c EC q
Market Equilibrium S(p) = c+dp, so d=0 and S(p) c. p q* = c q Market quantity supplied is fixed, independent of price
Market equilibrium Market Market quantity supplied is demand fixed, independent of price. S(p)=C+dp, so d=0 andS(p)≡c p D-1(g)=(a-g)/b gc q
Market Equilibrium S(p) = c+dp, so d=0 and S(p) c. p q p* D-1 (q) = (a-q)/b Market demand q* = c Market quantity supplied is fixed, independent of price
Market equilibrium Market Market quantity supplied is demand fixed, independent of price. S(p)=C+dp, so d=0 andS(p)≡c p*= D-9); that is, (a-c)/b p =(a-c)b D-1(g)=(a-g)/b gc q
Market Equilibrium S(p) = c+dp, so d=0 and S(p) c. p q p* = (a-c)/b D-1 (q) = (a-q)/b Market demand q* = c p* = D-1 (q*); that is, p * = (a-c)/b. Market quantity supplied is fixed, independent of price