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Wednesday, July 24, 2013

PPT On Interaction Of Demand And Supply

Interaction Of Demand And Supply Presentation
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Interaction Of Demand And Supply Presentation Transcript:
1.Interaction of demand and supply

2.Contents
Meaning of equilibrium
Determination of equilibrium price
How equilibrium is “self righting concept”
Excess demand
Excess supply
Movement of equilibrium price
Affect of Change in Demand on equilibrium
Affect of Change in Supply on equilibrium

3.Equilibrium-meaning
It is the point at which quantity demanded and quantity supplied is equal
Equilibrium is a state in market where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change.

4.Market equilibrium refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the equilibrium price.

5.Determination of equilibrium qty and price

6.Equilibrium is ‘self righting’-meaning
It means that if we try to move away from the equilibrium situation it will revert back to its original position, if there is no external disturbance.
How equilibrium is “self righting concept”
Excess demand
Excess supply

7.Excess demand-self righting

8.Excess supply-self righting

9.Movement to a new equilibrium

10.Affect of Change in Demand on equilibrium

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