,
,
,I operate at kinder garden level. I have explained core concepts that you probably already know in an
easy-to-understand way with visuals. You can also use them for your projects. Made myself, not from
internet, 100% unique.
Chapter 2 - The Short Run
2.1 The Goods Market
The short-run good market demonstrates how prices and quantities adjust to equilibrate supply and
demand, but sticky prices and wages can cause temporary fluctuations in output and employment.
In macroeconomics, understanding short-run dynamics is essential for analyzing fluctuations in
output, employment, and prices. Chapter 1 introduces the concept of the “good market,” a simplified
framework used to illustrate how markets function in the short run and how prices and quantities
adjust to equilibrate supply and demand.
,Market Equilibrium
In the short run, firms can adjust output in response to demand fluctuations, but some prices,
particularly wages, may be sticky. This stickiness prevents instantaneous adjustment, leading to
temporary surpluses or shortages.
, Example Calculation
Thus, the equilibrium price is 16, and the equilibrium quantity is 68 units. This calculation illustrates
how the market reaches a short-run equilibrium, where the quantity demanded equals the quantity
supplied.
Shifts in Demand and Supply
In the short run, changes in income, preferences, or production technology can shift the demand or
supply curves. For instance, an increase in consumer income may increase demand for the good,
shifting the demand curve to the right:
This
demonstrates that a demand increase raises both the equilibrium price and quantity in the short run.
,
,I operate at kinder garden level. I have explained core concepts that you probably already know in an
easy-to-understand way with visuals. You can also use them for your projects. Made myself, not from
internet, 100% unique.
Chapter 2 - The Short Run
2.1 The Goods Market
The short-run good market demonstrates how prices and quantities adjust to equilibrate supply and
demand, but sticky prices and wages can cause temporary fluctuations in output and employment.
In macroeconomics, understanding short-run dynamics is essential for analyzing fluctuations in
output, employment, and prices. Chapter 1 introduces the concept of the “good market,” a simplified
framework used to illustrate how markets function in the short run and how prices and quantities
adjust to equilibrate supply and demand.
,Market Equilibrium
In the short run, firms can adjust output in response to demand fluctuations, but some prices,
particularly wages, may be sticky. This stickiness prevents instantaneous adjustment, leading to
temporary surpluses or shortages.
, Example Calculation
Thus, the equilibrium price is 16, and the equilibrium quantity is 68 units. This calculation illustrates
how the market reaches a short-run equilibrium, where the quantity demanded equals the quantity
supplied.
Shifts in Demand and Supply
In the short run, changes in income, preferences, or production technology can shift the demand or
supply curves. For instance, an increase in consumer income may increase demand for the good,
shifting the demand curve to the right:
This
demonstrates that a demand increase raises both the equilibrium price and quantity in the short run.
