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Unit 2 Demand, Supply, and Market Equilibrium (Markets (Local, National,…

- - - - Law of diminishing marginal utility
      - Income and substitution effect
      - Price as an obstacle to buyers
    - - Individual demand
      - Market demand
      - Determinants of Demand
        
        Change in consumer taste and/or preference
        
        Change in number of buyers
        
        Change in income
        
        Normal goods
        
        Inferior goods
        
        Change in price of related goods
        
        Complementary goods
        
        Substitute goods
        
        Change in consumer expectations
        
        Future prices
        
        Future income
  - - - Price acts as an incentive to producers
      - At some point, costs will rise
    - - Individual supply
      - Market supply
      - Determinants of Supply
        
        Change in resource prices
        
        Change in technology
        
        Change in taxes
        
        Change in subsidy
        
        Change in price of other goods
        
        Change in producer expectations
        
        Change in number of suppliers
  - - - Equilibrium price (market-clearing price)
        and Equilibrium quantity
      - Surplus and Shortage
        
        Government set prices
        
        Price Ceiling
        
        Price Floor
      - Rationing function of prices
      - Efficient allocation
        
        At equilibrium price and quantity
        
        Productive efficiency
        
        Allocative efficiency