Presentation on theme: "Microeconomics: The Price System at Work by: Chanon Amphan, Joel Fonseca, Ezekiel Knowlin, and Joshua Pope UNIT 2 CHAPTER 6 SECTION 2."— Presentation transcript:
Microeconomics: The Price System at Work by: Chanon Amphan, Joel Fonseca, Ezekiel Knowlin, and Joshua Pope UNIT 2 CHAPTER 6 SECTION 2
Slide 1 Main- How changes in deman and supply cause prices to change. Key Terms- Economic Model, Market Equilibrium, Surplus, Shortage, and Equilibrium
Slide 2 Economic Model-set of assumptions that can be listed in a table, illustrated with a graph, or even stated algebraically to help analyze behavior and predict outcomes Market Equilibrium-situation in which quantity demanded is equal to the supply
Slide 3 Surplus - have extra product after selling Shortage - don't have enough product Equilibrium Price - price at which market equilibrium is achieved
Slide 4 Economists use market models to help predict and explain market prices. Changes in price are almost always caused by a change in demand, supply, or both. Economists and/or producers can set up supply-demand curves to help anticipate unpredictable events and to help account for elasticity
Slide 5 Theory of Competitive Pricing-describes ideal conditions of an ideal competitive economic system for the purpose of comparing real-world non-ideal systems -Producers naturally vie for consumer attention with lowered prices and advertising -Market is ideally completely self-sufficient because of natural tendencies of producers and consumers
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