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Supply and Demand

Supply and demand is a central topic to the study of economics because it models how price is determined in a market. The model shows that price will shift until the quantity supplied by producers is equal to the quantity demanded by consumers. This is when an economic equilibrium occurs, when quantity supplied and quantity demanded are equal.

The supply is defined by the relationship between quantity supplied and the price of a good or service. The supply curve is generally upward sloping implying that producers are willing to produce more units as price for the good increases and they are able to sell at a higher price. The demand curve is defined by the relationship between quantity supplied and the price of a good or service. The demand curve is generally downward sloping implying that consumers are willing to purchase more units of a good or service as the price decreases. 

According to neoclassical economics, the market will always trend back towards equilibrium in the long run. This is conditional on an efficient market structure where the price signals are readily available to all consumers and producers; there are no asymmetries of information or other inefficiencies. 

Comparing Supply-Demand Equilibrium: Competition vs Monopoly

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Electricity market's volatility

There are a number of factors which cause the electricity market's volatility. The peak and off-peak usage of energy, the fluctuating costs of the fossil fuels which are used to create electricity and the stability of the delivery infrastructure are just a few of the items that affect energy prices. Compare and contrast the opti

Describing Two Markets: Elastic and Inelastic Demand

Write a short essay identifying and describing two markets of your choosing; the first characterized by an elastic demand and the second one by an inelastic demand. Indicate why your choices have the relative elasticities they do. Market One: What are some of the goods you purchase in your life for which your demand is mos

Demand, Supply and Market Equilibrium

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Alexander Corporation is a used car dealership serving Los Angeles Metropolitan area. The company has experienced a rather sharp decline in used car prices in recent years. A casual observation of the secondary car market by the management reveals that this is an industry wide national trend and it is not specific to the Alexa

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Use the following general linear supply function to answer this question: Qs = 40 + 6P - 8PI + 10F Where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. If PI = $20 and F = 60 what is the equation of the supply function? Qs

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Discuss the situation by writing the solutions, and then show the solutions Scenario One In the early part of the last decade, there was an overproduction of coffee. The price dropped so low that producers' costs were higher than the market price. The reason this happened was that market prices became high before this,

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As an economist for ABC Plastics, your boss has asked you to respond to some questions she has regarding the company's main product, tablet cases. A marketing research firm recently developed the following supply and demand schedules for tablet cases: (please see attachment) You are to develop a report addressing the followin

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Mastering the economic way of thinking means learning to reason in terms of supply and demand. Here are additional questions on which you can practice. Your answers are less important than the reasoning with which you arrive at those answers. You should probably begin in each case by sketching a small supply and demand graph. Th

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Please explain the likely effects on Savings (Gross Private Domestic) Investment, Long Term Real Interest Rates, The Capital Stock, Natural RGDP and Natural Per Capita RGDP of a decrease in Government Investment Spending (with no change in tax rates). Please explain this in about two pages double spaced, and include information

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Strong Dollar

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Maximizing profit question

Imagine that we are selling bottles of CocaCola in a vending machine. Currently, we charge $1.50 per bottle and have found through trial-and-error that if we raise the price by 1%, the quantity purchased will change by approximately -2% (...in other words, ?=2). If it will cost us approximately $0.75/bottle to supply more Coke

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