(Demand and Supply) (Demand)

3 1. (Price Demand)

2. (Income Demand)

3. (Cross Demand)

Law of Demand

2 (Income effect) (Real Income) (Substitution effect)

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1

(P) (/)

(Q) (/)

25 20 15 10 5

8 10 12 16 20

(Individual Demand and Market Demand)

(Individual Demand)

(Market Demand)

(/)

(/)

25 20 15 10 5

8 10 12 16 20

0 4 8 10 12

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(Determinants of Demand) 2 1. 2.

1.

2 1.1 (Substitution Goods) 1.2 (Complementary Goods)

2. 2 2.1 (Normal Goods) 2.2 (Inferior Goods)

3. 4. 5. 6. 7.

(Demand Function)

Qx = f (Px, Py, Y, A1, A2, ) Qx = f (Px)

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2 1. (Change in Quantity Demanded)

2. (Shifts in the Demand

Curve)

(P) (/)

(Q) (/)

(Q)

(/) (Q)

(/) 25 20 15 10 5

8 10 12 16 20

5

25

20

15

10

P (/)

5 20 15 10 Q (/)

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5

25

20

15

10

P (/)

5 20 15 10 Q (/)

5

25

20

15

10

P (/)

5 20 15 10 Q (/)

25 30

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(Supply)

Law of Supply

1

(P) (/)

(Q) (/)

25 20 15 10 5

16 14 12 10 8

(Individual Supply and Market Supply) (Individual Supply)

(Market Supply)

(/) (/)

25 20 15 10 5

16 14 12 10 8

12 10 8 6 4

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(Determinants of Supply)

2 1. 2.

1. 2. 3. 4. 5. 6.

(Supply Function)

Qx = f (Px, B1, B2, )

Qx = f (Px)

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2 1. (Change in Quantity Supplied)

2. (Shifts in the Supply

Curve)

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(Market Equilibrium)

(/)

() Qs - Qd Qd Qs

25 20 15 10 5

8 14 20 26 32

28 24 20 16 12

(Market Equilibrium)

(/)

() 5

0 10 15 20 25 30

20

15

5

10

35

25

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1. 1.1

1.2 2.

2.1

2.2

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3. 3.1 3.2 3.3 3.4

2

1. (Price Support or Minimum Price) 2. (Price Ceiling)

1. (Price Support or Minimum Price)

2

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1.1

P

1.2

P

Q

Q

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2. (Price Ceiling)

P

(Elasticity of Demand and Supply)

(Elasticity)

(Elasticity of Demand) 3

1. (Price Elasticity of Demand) 2. (Income Elasticity of Demand) 3. (Cross

Price Elasticity of Demand)

Q

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I (Price Elasticity of Demand)

x

xd

d

P%Q%E

E

20% 40%

1. (Perfectly Inelastic Demand ; Ed = 0)

2. (Inelastic Demand ; 0 < Ed < 1)

3. (Unitary Elastic Demand ; Ed = 1)

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4. (Elastic Demand ; 1 < Ed < )

5. (Perfectly Elastic Demand ; Ed = )

Elastic Unitary Elastic Inelastic

Ed > 1 Ed = 1 Ed < 1

1.

2.

3.

4.

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II (Income Elasticity of Demand)

Y%Q%

EY

- (Normal Goods) - (Inferior Goods) 6,000 7,000 600 / 680 / 30% 10%

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III (Cross Price Elasticity of Demand)

y

xC P%

Q%

E

- 2 (Substitution Goods)

- 2 (Complementary Goods)

10% 5% 90 60 / 70 80 /

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(Elasticity of Supply; Es) (Price Elasticity of Supply)

x

xs

s

P%Q%E

E

1,200 150 1,000 120

1. (Perfectly Inelastic Supply ; Es = 0) 2. (Inelastic Supply ; 0 < Es < 1) 3. (Unitary Elastic Supply ; Es = 1) 4. (Elastic Supply ; 1 < Es < ) 5. (Perfectly Elastic Supply ; Es = )

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1.

2.

3.

4.