Supply and Demand
Delve into the intricacies of coffee market dynamics with a detailed exploration of supply and demand curves, shifts, and their impact on equilibrium. Uncover the factors influencing the quantities supplied and demanded, leading to surplus or shortage conditions. Gain insights into how market forces drive the price of coffee per cup, shaping consumer behavior and producer decisions.
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Presentation Transcript
Chapter 3 Supply and Demand
Figure 3.1 Market Supply Curve for Cups of Coffee 1.80 Supply 1.60 1.40 Price? of? Coffee? ($? per? Cup) 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 1400 Cups? of? Coffee? Supplied? per? Week
Figure 3.2 An Increase in Supply 1.80 S2 S1 1.60 1.40 Price? of? Coffee? ($? per? Cup) 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 1400 1600 1800 Cups? of? Coffee? Supplied? per? Week
Figure 3.3 A Decrease in Supply 2.00 S2 1.80 S1 1.60 Price? of? Coffee? ($? per? Cup) 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 1400 Cups? of? Coffee? Supplied? per? Week
Figure 3.4 Market Demand Curve for Cups of Coffee 2.40 2.20 2.00 1.80 Price? of? Coffee? ($? per? Cup) 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 Cups? of? Coffee? Demanded? per? Week
Figure 3.5 An Increase in Demand 2.40 2.20 2.00 1.80 Price? of? Coffee? ($? per? Cup) 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 D1 D2 0.00 0 200 400 600 800 1000 1200 1400 Cups? of? Coffee? Demanded? per? Week
Figure 3.6 A Decrease in Demand 2.40 2.20 2.00 1.80 Price? of? Coffee? ($? per? Cup) 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 D2 D1 0.00 0 200 400 600 800 1000 1200 Cups? of? Coffee? Demanded? per? Week
Figure 3.7 Surplus, Shortage, and Equilibrium in the Market 2.40 2.20 2.00 Surplus Price? of? Coffee? ($? per? Cup) 1.80 Supply 1.60 1.40 (D=600) (S=1000) E 1.20 1.00 0.80 0.60 0.40 0.20 Demand 0.00 0 200 400 Cups? of? Coffee? per? Week 600 800 1000 1200
Figure 3.8 Market Adjustment to an Increase in Supply 2.40 2.20 2.00 Price? of? Coffee? ($? per? Cup) 1.80 S1 S2 1.60 1.40 Surplus E1 1.20 1.00 0.80 E2 0.60 0.40 0.20 Demand 0.00 0 200 400 600 800 1000 1200 1400 1600 Cups? of? Coffee? per? Week
Figure 3.9 Market Adjustment to an Increase in Demand 2.40 D1 D2 2.20 2.00 1.80 Supply Price? of? Coffee? ($? per? Cup) 1.60 E2 1.40 E1 1.20 1.00 Shortage 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 1400 1600 Cups? of? Coffee? per? Week
Table 3.3 Summary of the Market Effects of Shifts in Supply or Demand
Figure 3.10 Market Adjustment with an Increase in Both Supply and Demand 2.40 D1 D2 2.20 2.00 Price? of? Coffee? ($? per? Cup) 1.80 S2 S1 1.60 1.40 E2 E1 Effect? on? price? is? ? ambiguous 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0 200 400 600 800 1000 1200 1400 1600 Cups? of? Coffee? per? Week
Table 3.4 Summary of the Market Effects When Both Supply and Demand Shift
Figure 3.11 Price Elasticity of Demand (a) Relatively price-elastic demand. Price S2 S1 P2 P1 D Q2 Q1 Quantity
Figure 3.11 Price Elasticity of Demand (b) Relatively price-inelastic demand. Price S2 S1 P2 P1 D Q2 Q1 Quantity
