Untitled Haiku Deck
Published on Nov 22, 2015
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PRESENTATION OUTLINE
Why is the price of gasoline $3.50/gallon and the price of milk $4.50/gallon.
Why is there a rise in the price of roses in February?
To understand this we need to learn about demand and supply and how the market establish prices.
Photo by Greg Woodhouse Photography
A market is a group of buyers and sellers of particular good or service.
Buyers determine demand.
Sellers determine supply.
We assume a competitive market
Photo by MdAgDept
Perfect Competition:
Products are the same
Numerous buyers and sellers so that each has no influence over price
Buyers and Sellers are price takers
Photo by elvinj
Demand
Photo by Ruth and Dave
INCOME
1. Normal good
Other things constant
An increase in income leads to an increase in demand
2. Inferior good
Other things constant
An increase in income leads to a decrease in demand
Photo by MIKI Yoshihito (´･ω･)
Supply
Photo by klausbalzano
Technology
Photo by Omnitographer
