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Demand and supply analysis. The demand curve The demand curve: The demand for potatoes (monthly)

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Presentation on theme: "Demand and supply analysis. The demand curve The demand curve: The demand for potatoes (monthly)"— Presentation transcript:

1 Demand and supply analysis

2 The demand curve

3 The demand curve: The demand for potatoes (monthly)

4 Market demand for potatoes (monthly) Quantity (tonnes: 000s) Price (cents per kg) Demand Price (cents per kg) 4 Market demand (tonnes 000s) 700 A Point A

5 Quantity (tonnes: 000s) Price (cents per kg) Demand Price (cents per kg) 4 8 Market demand (tonnes 000s) ABAB Point A B Market demand for potatoes (monthly)

6 Quantity (tonnes: 000s) Price (cents per kg) Demand Price (cents per kg) Market demand (tonnes 000s) ABCABC Point A B C Market demand for potatoes (monthly)

7 Quantity (tonnes: 000s) Price (cents per kg) Demand Price (cents per kg) Market demand (tonnes 000s) ABCDABCD Point A B C D Market demand for potatoes (monthly)

8 Quantity (tonnes: 000s) Price (cents per kg) Demand Price (pence per kg) Market demand (tonnes 000s) ABCDEABCDE Point A B C D E Market demand for potatoes (monthly)

9 Demand and supply analysis Shifts in the demand curve Shifts in the demand curve

10 D0D0 Price P OQ0Q0 Quantity An increase in demand

11 Price P O Quantity D0D0 Q0Q0 An increase in demand

12 Price P O Quantity D0D0 Q0Q0 D1D1 Q1Q1 An increase in demand

13 Price P O Quantity D0D0 Q0Q0 A decrease in demand

14 Price P O Quantity D0D0 Q0Q0 Q2Q2 D2D2 A decrease in demand

15 Demand and supply analysis The supply curve

16 The supply curve: The supply of potatoes (monthly)

17 Price (cents per kg) Quantity (tonnes: 000s) Supply Market supply of potatoes (monthly)

18 Price (cents per kg) Quantity (tonnes: 000s) Supply a P 4 Q 100 a Market supply of potatoes (monthly)

19 Price (cents per kg) Quantity (tonnes: 000s) Supply a b P 4 8 Q abab Market supply of potatoes (monthly)

20 Price (cents per kg) Quantity (tonnes: 000s) Supply a b c P Q abcabc Market supply of potatoes (monthly)

21 Price (cents per kg) Quantity (tonnes: 000s) Supply a b c d P Q abcdabcd Market supply of potatoes (monthly)

22 Price (cents per kg) Quantity (tonnes: 000s) Supply a b c d e P Q abcdeabcde Market supply of potatoes (monthly)

23 Demand and supply analysis Shifts in the supply curve Shifts in the supply curve

24 Shifts in the supply curve P QO S0S0

25 P QO S0S0 S1S1 Increase Shifts in the supply curve

26 P QO S2S2 S0S0 S1S1 IncreaseDecrease Shifts in the supply curve

27 Demand and supply analysis Equilibrium

28 Equilibrium price and output : The Market Demand and Supply of Potatoes (Monthly)

29 The determination of market equilibrium (potatoes: monthly) Quantity (tonnes: 000s) Price (cents per kg) E D C B A a b c d e Supply Demand

30 Quantity (tonnes: 000s) Price (cents per kg) E D C B A a b c d e Supply Demand SHORTAGE ( ) The determination of market equilibrium (potatoes: monthly)

31 Quantity (tonnes: 000s) Price (cents per kg) E D C B A a b c d e SURPLUS ( ) Supply Demand The determination of market equilibrium (potatoes: monthly)

32 Quantity (tonnes: 000s) Price (cents per kg) E D C B A a b c d e QeQe PePe Supply Demand The determination of market equilibrium (potatoes: monthly)

33 Demand and supply analysis Effect of a shift in the demand curve Effect of a shift in the demand curve

34 Effect of a shift in the demand curve P Q O Pe1Pe1 Qe1Qe1 S D1D1 g

35 P Q O Pe1Pe1 Qe1Qe1 S D1D1 D2D2 g An increase in demand

36 P Q O Pe1Pe1 Qe1Qe1 S g h D1D1 D2D2 Effect of a shift in the demand curve

37 P Q O Pe1Pe1 Pe2Pe2 Qe1Qe1 Qe2Qe2 S g h i D1D1 D2D2

38 P Q O Pe1Pe1 Qe1Qe1 S D1D1 g

39 P Q O Pe1Pe1 Qe1Qe1 S D1D1 D2D2 g A decrease in demand

40 P Q O Pe1Pe1 Qe1Qe1 S D1D1 D2D2 g Effect of a shift in the demand curve Pe2Pe2 Qe2Qe2 n m

41 Demand and supply analysis Effect of a shift in the supply curve Effect of a shift in the supply curve

42 Effect of a shift in the supply curve P Q O Pe1Pe1 Qe1Qe1 D S1S1 g

43 P Q O Pe1Pe1 Qe1Qe1 D S1S1 g An increase in supply S2S2

44 Effect of a shift in the supply curve P Q O Pe1Pe1 Qe1Qe1 D S1S1 g S2S2 p

45 P Q O Pe1Pe1 Qe1Qe1 D S1S1 g S2S2 p Pe2Pe2 Qe2Qe2 q

46 P Q O Pe1Pe1 Qe1Qe1 D S1S1 g

47 P Q O Pe1Pe1 Qe1Qe1 D S1S1 S2S2 g A decrease in supply

48 P Q O Pe1Pe1 Qe1Qe1 D S1S1 S2S2 jg Effect of a shift in the supply curve

49 P Q O Pe1Pe1 Pe3Pe3 Qe3Qe3 Qe1Qe1 D S1S1 S2S2 jg k


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