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mLine 118:
Line 118: − # A rise in price tends to increase supply and decrease demand. Conversely a fall in price tends to decrease supply and increase demand. '''LOWER PRICE MEANS HIGHER DEMAND'''+ − # When demand exceeds supply at a given price, the price tends to rise. Likewise, when supply exceeds demand, the price tends to decrease. + − # Price tends to move towards the amount at which the quantity in demand is equal to the quantity in supply: '''EQUILIBRIUM IS WHERE SUPPLY EQUALS DEMAND'''.+
Economics Lecture Two (view source)
Revision as of 11:53, September 5, 2009
, 11:53, September 5, 2009format
We can now state the three most basic principles of economics with respect to price:
We can now state the three most basic principles of economics with respect to price:
*A rise in price tends to increase supply and decrease demand. Conversely a fall in price tends to decrease supply and increase demand. '''LOWER PRICE MEANS HIGHER DEMAND'''
*When demand exceeds supply at a given price, the price tends to rise. Likewise, when supply exceeds demand, the price tends to decrease.
*Price tends to move towards the amount at which the quantity in demand is equal to the quantity in supply: '''EQUILIBRIUM IS WHERE SUPPLY EQUALS DEMAND'''.
Many of the problems in this course, and in any economics course, can be answered just by remembering and applying the above there principles about price.
Many of the problems in this course, and in any economics course, can be answered just by remembering and applying the above there principles about price.