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4.2
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Supply
() price ()
quantity demanded
() price ()
quantity supplied
D
Q
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
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Quantity
demanded
(Qd)
Quantity
supplied
(Qs)
Difference
(Qs Qd)
0.50
22
-22
1.00
15
-9
1.50
10
10
2.00
13
+6
2.50
15
+10
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Energy bars
Price/$
surplus
shortage
2.00
1.50
1.00
D
10
Quantity
Quantity demanded
Quantity supplied
Conclusion
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Price Ceiling
Price
S
shortage
P
Pc
D
Q
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Price Floor
surplusPrice
S
Pf
P
D
Q
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Price
S
P
P1
D
D1
Q1
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Q1
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
36
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
37
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Price
S1
S
P1
P
Price
S
Q1 Q
D S1
Quantity
Q1
Quantity
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Equilibriu
m
Quantity
Demand
Supply
Increase
Increase
Indetermina
te
Increase
Decrease
Decrease
Indetermina
te
Decrease
Increase
Decrease
Increase
Indetermina
te
Decrease
Increase
Decrease
Indetermina
te
MODULE: Microeconomics
TOPIC NO: 4
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Dd = Ss
D1
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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BUT
Equilibrium price can , or remained
unchanged.
Q1S
Personal Notes
S1
Price
Quantity
Dd < Ss
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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D1
P1
P
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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In this case:
(a) Equilibrium price will rise;
(b) Equilibrium quantity can , or remained
unchanged.
Price
Dd > Ss
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Personal Notes
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
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Conclusion
(a) When demand and supply changes in the same
direction, we are certain what happens to
equilibrium quantity BUT
(b)
(c)
(d)
(e)
SP BUSINESS SCHOOL
MODULE: Microeconomics
TOPIC NO: 4
46
SP BUSINESS SCHOOL