New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

EC Week 3 Lecture 4 In-Class notes

by: Danielle Linska

EC Week 3 Lecture 4 In-Class notes EC 201

Marketplace > Michigan State University > EC 201 > EC Week 3 Lecture 4 In Class notes
Danielle Linska
View Full Document for 0 Karma

View Full Document


Unlock These Notes for FREE

Enter your email below and we will instantly email you these Notes for Intro to Microeconomics

(Limited time offer)

Unlock Notes

Already have a StudySoup account? Login here

Unlock FREE Class Notes

Enter your email below to receive Intro to Microeconomics notes

Everyone needs better class notes. Enter your email and we will send you notes for this class for free.

Unlock FREE notes

About this Document

These notes cover supply, supply with demand as means of equilibrium.
Intro to Microeconomics
C. Liedholm
Class Notes
Econ, Economics, supply, supply and demand, demand




Popular in Intro to Microeconomics

Popular in Department

This 4 page Class Notes was uploaded by Danielle Linska on Wednesday September 14, 2016. The Class Notes belongs to EC 201 at Michigan State University taught by C. Liedholm in Fall 2016. Since its upload, it has received 15 views.


Reviews for EC Week 3 Lecture 4 In-Class notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/14/16
Lecture  4  Week  3  Chapter  4  (Supply) Wednesday,  September   14,  20112:41  PM Yellow  is  important  facts   Green  is  definitions   Bold  is  also  important Clicker  Questions Next  Time  Monday:   • Elasticity • Read:  Chapter  5   • Problem  Set  #1  will  be  available  Wednesday   Today: • Supply   • Equilibrium   • Change  in  equilibrium   Review:   • An  increase  in  the  price  of  lemon  lime  soda  will? ○ Decrease  the  quantity  demanded  of  that  product   • An  increase  in  the  price  of  Coke,  a  Lemon  Lime  substitute  will? Both  a)  and  b)  -­‐shift  to  the  right,  increase  demand  for  Lemon  Lime   ○ Supply • Amount  of  a  good  or  service  that  sellers  are  willing  and  able  to  sell • Q(SL)  <-­‐-­‐ resource  price § Element  of  your  cost   <-­‐-­‐ technology   § Element  of  your  cost <-­‐-­‐ price   § Element  of  your  revenue   • Price  of  Lemon  lime  Soda   • Resource  price   • Technology   Supply  Curve   • The  relationship  between  quantity  demanded  and   Upward  slope   • Resource  price   • Technology   Supply  Curve   • The  relationship  between  quantity  demanded  and   ○ Upward  slope   § The  higher  the  price,  the  more  the  suppliers  supply § When  price  goes  up,  increase  in  quantity  supplied Law  of  Supply   • The  quantity  supplied  of  a  good  rises  when  the  price  of  a  good  rises • Direct  relationship  between  price  and  quantity  supplied Change  in  Supply • Resource  price   ○ Increase  in  cost,  supply  less  resources  (above) ○ Decrease  in  cost,  supply  more  resource  (under) • Technology  (Weather)   ○ Positive  technology  increases  supply   ○ Negative  technology  decreases  supply • Both  shift  the  supply  curve  to  the  right  or  to  the  left   • Not  the  price  of  the  Lemon  Lime   • (Most  real  world  examples  will  come  from  agriculture) • Change  in  Quantity  Supplied   • Change  in Supply  (Shift) • If  the  wages  (  price  of  resource)  increase  in  the  LL  firm,  then  the  Lemon  Lime:   ○ Supply  curve  shifts  to  the  left Price  Determination  in  Markets   • The  market  demand  curve  shows  the  amount  demanded  at  every  price. • The  market  supply  curve  shows  the  amount  supplied  at  every  price. • The  question  now  is  whether  there  is  some  price  at  which  the  quantities   supplied  and  demanded  are  the  same? • Intersection  point  is  the  point  where  the  demanders  and  suppliers  are  as  one.   ○ Are  they  in  equilibrium? Equilibrium  Price  Defined • Equilibrium-­‐  The  price  at  which  the  quantity  supplied  equals  quantity   demanded. • At  the  equilibrium  price  there  is  no  net  tendency  for  PRICE  to  change. Excess  Supply • Excess  supply-  exists  when,  at  the  current  price,  the  quantity  supplied  exceeds   the  quantity  demanded demanded. • At  the  equilibrium  price  there  is  no  net  tendency  for  PRICE  to  change. Excess  Supply • Excess  supply-  exists  when,  at  the  current  price,  the  quantity  supplied  exceeds   the  quantity  demanded • Excess  Supply  =  Q(s)-­‐  Q(d)   Therefore,  you  lower  the  price  for  sales   ○ • Price  will  fall  to  equilibrium  naturally  if  you  are  not  at  equilibrium ○ Self-­‐interest   Excess  Demand • If  the  price  is  too  low,  below  equilibrium,  you  will  need  to  produce  more • When  there  is  an  EXCESS  DEMAND  for  a  good,  price  will  tend  to  RISE • When  excess  demand  or  excess  supply  is  quilibrium­‐oe • If  the  quantity  demanded  exceeds  the  quantity  supplied  of  Lemon  Lime,  then:   ○ There  will  be  a  shortage  and  the  price  will  rise Demand  for  Snickers  Bars   2016  Econ  201   $/Bar D DW M S T All  Demand .25 8 4 15 8 4 39 .20 15 8 20 12 5 58 • .15 25 12 30 15 6 88 .10 80 16 45 20 8 169 .05 100 20 50 30 10 210 • Supply  39  for  everyone • Just  enough  to  supply  demand  at  this  particular  point   ○ Price  is  $0.25 How  can  the  price  of  a  Snickers  Bar  change? • Shocks/Shifts   • Only  if  there  is  a  change  in  supply,  or  if  there  is  a  change  in  demand • Change  sin  demand  can  be  caused  by   ○ Changes  in   § Consumer  incomes § Price  od  substitutes § Price  of  complements   ○ Changes  in   § Consumer  incomes § Price  od  substitutes § Price  of  complements   • Changes  in  supply  can  be  caused  by   ○ Changes  in § Prices  of  inputs § technology Demand  Shift   • Direct  relationship  between  shift  direction  and  price   • Decrease  =  leftward   • Increase  =  rightward   Supply  Shift   • Inverse  relationship  between  supply  shift  and  price   • If  the  price  of  M&M's  a  substitute,  increase,  then  for  snickers  candy ○ Both  the  quantity  and  the  price  will  be  higher  


Buy Material

Are you sure you want to buy this material for

0 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.