About This Chapter
Supply and Demand in Microeconomics - Chapter Summary and Learning Objectives
In this chapter, your instructor will help you make sense of the complex economic model known as supply and demand as well as the key terms used by professional economists. The chapter begins with a discussion of an important Latin term, ceteris paribus. You'll also learn how a number of influential factors, such as price ceilings and floors, market forces and price elasticity, affect supply and demand curves. When you've finished watching the lessons and testing your own knowledge of the subject, you should be able to:
- Define ceteris paribus
- Define and explain demand and supply curves
- Discuss how market forces and equilibrium affect supply and demand
- Define and explain price ceilings and floors
- Discuss the differences associated with price, cross price and income elasticity
|The Concept of Ceteris Paribus in Economics||Summarize the Latin term ceteris paribus, highlighting its importance to the study of economics.|
|Understanding the Demand Curve in Microeconomics||Provide a definition for demand curve, and describe under what circumstances it might change position on a set curve.|
|The Supply Curve in Microeconomics||Provide a definition for supply curve, and describe under what circumstances it might change position on a set curve.|
|Causes of Supply and Demand Changes in Microeconomics||Using examples, discuss how market forces affect supply and demand changes on a supply and demand curve.|
|Market Equilibrium from a Microeconomics Perspective||Using examples, explain what is meant by market equilibrium and how it can change in response to shifts in supply and demand.|
|Identifying Shortages and Surpluses in Microeconomics||Demonstrate how shortages and surpluses can be identified on supply and demand curves, as well as how the market responds to shortages and surpluses.|
|Microeconomic Shifts in Supply and Demand Curves||Discuss under what circumstances supply and demand curves change, along with the subsequent effect on equilibrium and prices.|
|Using Market Forces to Manipulate Supply and Demand||Summarize the legal and illegal use of market forces to influence supply and demand curves and their subsequent effect on price and supply.|
|Price Ceilings and Price Floors in Microeconomics||Provide a definition of price ceilings and floors, using examples to demonstrate how they influence equilibrium.|
|Controlling Supply: Government Intervention and Market Forces||Using examples, explain how governmental interventions and market forces can determine supply. Compare the use of both legal and illegal economic tools and their influence on consumer demand, price and supply.|
|Price Elasticity of Demand in Microeconomics||Discuss the formula used to calculate price elasticity of demand. Provide examples of elastic and inelastic products.|
|Cross Price Elasticity of Demand: Definition and Formula||Explain the formula used to calculate cross price elasticity of demand.|
|Income Elasticity of Demand in Microeconomics||Demonstrate your understanding of the income elasticity of demand formula, including the relationship between income and demand|
|Price Elasticity of Supply in Microeconomics||Using examples of elastic and inelastic products, demonstrate your formulaic understanding elasticity of supply.|
1. Understanding the Demand Curve in Microeconomics
Learn what the demand curve in microeconomics is. Find out the common components of the demand curve and how they are created. See what causes a movement along a demand curve and what causes a shift of the entire curve.
2. The Supply Curve in Microeconomics
Learn about the supply curve and its unique characteristics. Find out some of the common terms used when discussing the supply curve and the difference between a movement along a supply curve and a shift of the entire curve. See some examples of each.
3. Causes of Supply and Demand Changes in Microeconomics
Learn what causes movements along the supply and demand curves. See how market forces work to cause these movements and the important role that price plays in this.
4. Market Equilibrium from a Microeconomics Perspective
Learn about the definition of market equilibrium. Learn how to identify the equilibrium point on a supply and demand graph and discover what causes this point to change in our everyday lives.
5. Identifying Shortages and Surpluses in Microeconomics
Supply shortages and surpluses are inefficient for business, but economics seeks to avoid them. In this lesson, find out how they happen, as well as how businesses work to avoid them.
6. Microeconomic Shifts in Supply and Demand Curves
Learn about the important forces that can cause the demand and supply curve to shift. Discover how this affects equilibrium and the prices you pay for goods and services.
7. Using Market Forces to Manipulate Supply and Demand
While the forces of supply and demand are powerful, they are not immobile. This lesson explains how various market forces can cause the supply and demand curves to shift.
8. Price Ceilings and Price Floors in Microeconomics
Governments can restrict prices from going too low or too high through use of price ceilings. This lesson explains these concepts, as well as problems that can arise from their use.
9. Controlling Supply: Government Intervention & Market Forces
Sometimes, despite the best efforts of the market, a heavy hand is needed to control supply. This lesson looks at how the government and the market can work to do just that.
10. Derived vs. Inelastic Demand in Business Markets
The simple law of demand governs much of the business world, however, there are some exceptions. In this lesson, we take a look at two of them - the idea of derived demand and the idea of inelastic demand.
11. Price Elasticity of Demand in Microeconomics
Discover the definition and formula for price elasticity of demand. See some real-world examples of how it is calculated, and find out what it means for demand of a good to be inelastic or elastic.
12. Cross Price Elasticity of Demand: Definition and Formula
Learn what cross price elasticity of demand means. Find out why business owners and economists like to know cross price elasticity, and discover how to calculate it. See some everyday examples.
13. Income Elasticity of Demand in Microeconomics
The income elasticity of demand is a useful tool that measures what happens to consumer demand for products and services when incomes change. We will work through the formula and interpret what the answers mean.
14. Price Elasticity of Supply in Microeconomics
Price elasticity of supply is similar to elasticity of demand, but there are differences too. Let's explore them by looking at some real-life examples of elastic and inelastic supply.
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Other chapters within the Economics 101: Principles of Microeconomics course
- Introduction to Microeconomics
- Consumer Behavior & Microeconomics
- Producers in Microeconomics
- Business Structures & Barriers to Entry
- Accounting & Economic Costs
- Market Structures in Economics
- Scarce Economic Resource Markets
- Business Technology, Research & Development
- Government Issues in Microeconomics
- Studying for Economics 101