Supply, demand, and equilibrium

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Here you will be introduced to the ceteris paribus assumption, which is crucial to building correlations between economic variables. When using ceteris paribus, we assume that all variables - with the exception of those in explicit consideration - will remain constant. We will then examine the supply and demand models and the resulting market equilibrium that occurs where the supply curve and the demand curve intersect.


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Objectives

Upon successful completion, you will be able to:

  • analyze and apply the mechanics of demand and supply for individuals, firms, and the market; and
  • determine equilibrium in the market under various situations that either cause movements or shifts in demand and supply.