Uploaded on May 3, 2011
Chapter 8 Video Lecture
Managerial Economics: A Problem Solving Approach
by Luke Froeb, Brian McCann
Summary of Main Points Chapter 8
-- A market has a product, geographic, and time dimension. Define the market before using supply--demand analysis.
-- Market demand describes buyer behavior; market supply describes seller behavior in a competitive market.
-- If price changes, quantity demanded increases or decreases (represented by a movement along the demand curve).
-- If a factor other than price (like income) changes, we say that demand curve increases or decreases (a shift of demand curve).
-- Supply curves describe the behavior of sellers and tell you how much will be sold at a given price.
-- Market equilibrium is the price at which quantity supplied equals quantity demanded. If price is above the equilibrium price, there are too many sellers, forcing price down, and vice versa.
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