Summary
Summary Unit 2b - Business Economics markets
- Course
- Institution
a) The interaction of supply and demand b) The drawing and interpretation of supply and demand diagrams to show the causes and consequences of price changes
[Show more]
Seller
Follow
maariyahpopat
Content preview
1.2.3The market
The interaction of supply and demand
¥ Supply and demand can be shown on one diagram
¥ Market equilibrium is that point at which
demand is equal to supply i.e. where the supply
and demand curve cross
¥ This is called the equilibrium point or equilibrium
price
¥ This is known as the market clearing price as all
products will be sold at this price
¤ all buyers can get the exact amount that they
want to buy at this price and all sellers provide
exactly the amount that they want to sell at
this price
¤ therefore, there is nothing left over i.e. the
market has cleared
¥ Any change in demand or supply will lead to a new
equilibrium price
At a price of P quantity demanded (qd) is equal to
quantity supplied (qs). All products are sold and no
products are left over i.e. the market has cleared.
At this price all products that have been offered for sale
by suppliers have been bought by buyers and all supply
has had an equal demand.
S
Price
P
D
Q
Quantity
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller maariyahpopat. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.02. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67474 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now