Topic 1: Supply and Demand PDF

Topic1. Supply and Demand References: [BM] Cap. 1 y Apéndice A.1. [KW] Caps. 3 y 6. [M] Caps.4 y 7. Humberto Llavador and Rosemarie Nagel  ANNOUNCEMENTS HW due next seminar. The material for ho...

Topic1. Supply and Demand References: [BM] Cap. 1 y Apéndice A.1. [KW] Caps. 3 y 6. [M] Caps.4 y 7. Humberto Llavador and Rosemarie Nagel  ANNOUNCEMENTS HW due next seminar. The material for homework is posted on Campus Virtual. Once more I will post the instructions for the experiments. However, from now on you should have access to the Bergstrom-Miller book. 2 QUESTIONS ABOUT THE HW? 3 What are we going to learn today? 4  THE SUPPLY AND DEMAND Theory of Competitive Markets
Theory of Supply and Demand – This theory will be useful for us to predict the outcome (equilibrium prices, quantities, profits) of the experiments. – Also we can anticipate further questions: What will happen to the price / quantities if suppliers’ sales cost rises by 5 units What will happen to the price / quantities if the government subsidizes each demander for the purchase of apples 5  SUPPLY AND DEMAND What data / tools do we need to predict the outcome of price and quantities of competitive equilibrium?
The supply curve: supply table
The demand curve: demand table
Data: Distribution of the values / costs for buyers and suppliers 6 Your experimental results 7  THE SUPPLY CURVE Definition: The supply curve tells us the total amount which the suppliers of goods would like to sell a good at each of the possible prices. Data: Table of Distribution of Suppliers
the sales cost of each Supplier DATA GIVEN IN THE Steps: PROBLEM! – Table of Distribution of Suppliers
Supply Table – Supply Table
Supply Curve WE MUST OBTAIN THEM! 8  Table of the Distribution of Agents Supply Table: (We must (data) obtain it) Type Number Cost Value Price Range Amounts agents (P) Offered Supply 20 5 Low P