3E Economics par. 2.3

• Economie
• Middelbare school
• vwo
• Leerjaar 3

LESSON OBJECTIVES

You are able to explain when an excess demand occurs

You can explain how the equilibrium price is determined

You can explain when an excess supply occures 

Demand curve

Supply curve

Market equilibrium

Market

Demand curve and supply curve lead to a market equilibrium

(where supply and demand are equal)

Qs = Qd

1 = Solve the equation

2 = market equilibrium where the 2 points cross (intersection point)

Market equilibrium

The intersection point where supply and demand are equal for a certain product (Qs = Qd)

Market

What do we calculate at the market equilibrium?

Calculation

For the market of a certain product we have the following equations

Qd = - 2,4p + 1200 

Qs = 4p - 400

Market equilibrium where

Qs = Qd

calculate the equilibrium price

Calculation

For the market of a certain product we have the following equations

Qd = - 2,4p + 1200 en Qs = 4p - 400

Qs = Qd

4p - 400 = - 2,4p + 1200

6,4p = 1600

P = 250

Equilibrium price = €250

Calculation

Now we now the equilibrium price ( €250) we can calculate the equilibrium quantity

Qd = - 2,4p + 1200 and Qs = 4p - 400

-2,4 x 250 + 1200 = 600

Equilibrium quantity = 600

Check: 4 x 250 - 400 = 600

Excess supply and demand

Situations can occur in which there is a excess demand

Quantity demanded > quantity supplied

OR

Quantity supplied > quantity demanded

Assignments

Start working on 1 t/m 11 of section 2.3 (page 51 and further)

LESSON OBJECTIVES

You are able to explain when an excess demand occurs

You can explain how the equilibrium price is determined

You can explain when an excess supply occures