Microeconomics: Demand, Supply, and Market Equilibrium, Study notes of Microeconomics

Download Microeconomics: Demand, Supply, and Market Equilibrium and more Study notes Microeconomics in PDF only on Docsity!

MANAGEMENT ADVISORY SERVICES BOBADILLA/ TRINIDAD/ UR

MAS.Economics OCTOBER 201 6

Since 1977

Economics is a social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants. Economics can generally be broken down into: Macroeconomics, which concentrates on the behavior of the aggregate economy; and Microeconomics, which focuses on individual consumers.

Coverage of the Discussion Microeconomics A. Focus B. Demand C. Supply D. Market Equilibrium E. Costs of Production F. Production G. Market Structure Macroeconomics A. Focus B. Aggregate Demand and Supply C. Business Cycles D. Economic Measures E. Monetary Policy F. Fiscal Policy G. Economic Theories H. The Global Economy and International Trade I. Foreign Exchange Rates J. Foreign Investment The Effects of the Global Economic Environment on Strategy A. General Environment B. Industry Environment C. Industry Analysis D. Strategic Planning E. Estimating the Effects of Economic Change

Microeconomics

A. Focus

B. Demand

C. Supply

D. Market Equilibrium

E. Costs of Production

F. Production

G. Market Structure

The Effects of the Global Economic Environment on Strategy A. General Environment B. Industry Environment C. Industry Analysis D. Strategic Planning E. Estimating the Effects

Microeconomics

A. Focus

B. Demand

C. Supply

D. Market Equilibrium

E. Costs of Production

F. Production

G. Market Structure

Microeconomics

A. Focus

B. Demand

C. Supply

D. Market Equilibrium

E. Costs of Production

F. Production

G. Market Structure

Demand is the quantity of a good or service that consumers are willing and able to purchase at a range of prices at a particular time. Market demand for a product can be recorded in a schedule or a graph. The Law on Demand states that an inverse relationship exists between the price and quantity demanded That is, fewer products are demanded at higher prices this is based on the behavior of a consumer. Graphically a demand curve shows a downward sloping curve. The illustration that follows is the demand schedule and demand curve for Product X.

When price for X is $60 QUANTITY DEMANDED is 2,500. When price increases to $70 QUANTITY DEMANDED DECREASE to 2,000 , on the other hand when price decrease to $50 QUANTITY DEMANDED INCREASE to 3, THEREFORE, FOR QUANTITY DEMANDED INCREASING OR DECREASING ONLY PRICE IS THE CAUSE THE MOVEMENT IN THE GRAPH IS ISOLATED TO A SINGLE DEMAND CURVE

Demand Curve Shift.A demand curve shifts when demand variables other than price change. For example, if the price of substitute products for Product X increase in price, the demand for Product X would shift upward and to the right. A demand curve shift is illustrated in the next slide

Demand Shifts

Complementary Goods

Normal and Inferior Goods