How technology is changing the way real estate sellers engage with buyers
You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities...
-
Upload
vance-summerhill -
Category
Documents
-
view
219 -
download
2
Transcript of You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities...
![Page 1: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/1.jpg)
TODAY’S OBJECTIVES• You will…– Understand how to graph supply, demand,
and find equilibrium prices and quantities– Understand what a market is and how buyers
and sellers interact– How surpluses and shortages come about– The influence the government can have on
prices
![Page 2: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/2.jpg)
MARKETS, EQUILIBRIUM & PRICES
PRICE QTY
![Page 3: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/3.jpg)
WHEN SUPPLY AND DEMAND MEET
• Equilibrium – when demand and supply meet– Sets price that goods will be bought and sold– Referred to as market equilibrium
• Price set is known as the equilibrium price– Also known as the
“market-clearing price”• There would be no
extra product or wants
– Equilibrium quantity – qty. marked at equilibrium
![Page 4: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/4.jpg)
PRICES BRING MARKETS TO BALANCE
• What is a market?– Any place where buyers and sellers
come together for a product• Prices always move dependent on
buyers and sellers– Buyers only willing to pay a certain price– Sellers want to sell at a high price
• Sets the “market price” – willing to pay price– If people price things low…
• They sell out, need to make more, but can raise prices
– If people price things high…• They don’t sell, lower the price, and clear
inventory
![Page 5: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/5.jpg)
“WHAT HAPPENS WHEN THE PRICE IS WRONG?
• When the prices are wrong – considered to be in disequilibrium– Leads to either excess
supply or excess demand – Excess Supply – Price is too
HIGH– Excess Demand – Quantity
was too LOW• Prices eventually shift, but
takes time
![Page 6: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/6.jpg)
PRICE TOO LOW – SHORTAGES CREATED
Excess demand – not enough of a productShortage createdPrice is too low
To get to equilibrium price would need to rise
4000 still demanded at this price
![Page 7: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/7.jpg)
PRICE TOO HIGH – SURPLUS CREATED
Excess supply – too much of a productCreates surplusPrice is to high
To reach equilibrium the price will need to be reduced
4000 extra products at this price
![Page 8: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/8.jpg)
SHIFTS IN SUPPLY AND DEMAND Factors cause shifts in entire lines
Supply and demand shiftersCreates changes in prices
3 questions to ask when equilibrium changesDoes it affect supply? demand? or both?Does it shift the line to the right or to the left?What is the new price and quantity w/ the change?
![Page 9: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/9.jpg)
HOW PRICE IS AFFECTED BY DEMAND SHIFT
• Demand shifts for many reasons
• New line is created; changes the price– Increase in
demand -> higher price
– Decrease in demand -> lower price
Report on smoothies being good for you increases demand (shifts right) – leads to higher equilibrium price
![Page 10: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/10.jpg)
HOW PRICE IS AFFECTED BY A SUPPLY SHIFT
• Supply shifts for many reasons
• New line is created; affects the price– Decrease in supply
-> higher price– Increase in supply
-> lower price
Poor harvest leads to a shift in supplies for smoothies– leads to higher equilibrium price
![Page 11: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/11.jpg)
WHAT IF BOTH SHIFT?• When both shift, a new equilibrium is found– Can mean numerous outcomes
Now both supply and demand increase – leads to more quantity and higher price
![Page 12: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/12.jpg)
WHAT DO THE SHIFTS TELL US?
• Changes in prices tell us many things– Sellers how much to produce (more/less)– Sellers how much to charge– Shows buyers interest (demand) for a product
• Prices give us incentives– Encourages us to produce more to make profit
• Allows markets to adjust to changing conditions– Helps to respond to global issues– Helps to use resources efficiently
![Page 13: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/13.jpg)
WHAT HAPPENS WHEN THE GOVERNMENT IS INVOLVED?
• Government gets involved “for the common good”– Believe prices are too high or too
low• Affect prices in two ways– Price ceilings – setting a MAX
PRICE– Price floors – setting a MIN PRICE
• Creates shortages which can lead to “black markets”
• Difficult to stop gov’t control due to political pressures from those it benefits
![Page 14: You will… – Understand how to graph supply, demand, and find equilibrium prices and quantities – Understand what a market is and how buyers and sellers.](https://reader035.fdocuments.in/reader035/viewer/2022062417/5518ad75550346b31f8b4d76/html5/thumbnails/14.jpg)
www.youtube.com/watch?v=kID3lnFM_EI
Video on market equilibrium https://
www.youtube.com/watch?v=R0h8kfA4i_A&list=TLnFFbCQEoue0Vhct6AvNXIpECdFnHJ3bK
Video on price ceilings (rent control) https://
www.youtube.com/watch?v=R12m0QHweGg
Video on invisible hand http://
www.youtube.com/watch?v=wbU6TdrnqmU
Video on price floors and ceilings (lecture)