Demand

How do markets decide production of items, their quantities and prices?

variables

market price (P): what buyer pays in store

quantity demanded (Q_d):

quantity supplied (Q_s):

markets

market: interaction of demand and supply

Monopoly: one seller

oligopoly: 3-7 sellers

monopolistic competition: 20-100 sellers

perfect competition: $\infty$ sellers

ceteris paribus: all else equal; change only one variable

static analysis: observe effect of making one change

Demand schedule

demand and supply

changes

graph model

equilibrium

market events