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Market Equilibrium - Coggle Diagram
Market Equilibrium
Government Intervention in the Market
Minimum Price
Regulation to prevent falling of price below market level
Agriculture sector: paddy rice, rubber
Taxes
Direct Taxes
Indirect Taxes
Maximum Price
Regulation to prevent rising of price above market level
Rice, sugar, cooking oil etc
Subsidies
incentive from government
fertilizers, sugar, oil
Changes in Supply and Demand
Case 2: Different magnitude
Both
equilibrium price and quantity
increase
Case 3: Different magnitude
Both
equilibrium price and quantity
decrease
Case 1: Same magnitude
constant: equilibrium price
increase: quantity
Determination of Equilibrium Price&Quantity
Shortage
Quantity of Demand > Quantity of Supply
Surplus
Quantity of Supply > Quantity of Demand
Changes in Demand
curve shift to left
decrease in demand; equilibrium price and quantity decrease
Curve shift to right
increase in demand; equilibrium price and quantity increase
Changes in Supply
curve shift to left
decrease in supply; equilibrium price and quantity decrease
curve shift to right
increase in supply; equilibrium price and quantity increase
Definition
Quantity of supplied = Quantity of demanded