Introducing Supply and Demand
Read the sections on Demand, Supply, Market Equilibrium, and Government Intervention and Disequilibrium for a mathematical exposition of the demand and supply model, clicking through to the next when you have finished each page. The chapter also covers price ceilings and price floor analysis as well as quantity regulations.
Changes in Demand and Supply and Impacts on Equilibrium
Equilibrium
In combining these two
potential shifts, equilibrium is constantly subjected to both factors
resulting in supply shifts and factors resulting in demand shifts. Due
to the demand curve sloping downward and the supply curve sloping
upwards, they inadvertently
will cross at some given point on any supply/demand chart. This
cross-section, or equilibrium, serves as a price and quantity tracking
point based upon the consistent inputs of overall demand and supply
availability. Any change in either factor
will result in immediate impact on equilibrium, balancing the
new demand or supply with a corresponding volume and appropriate average
price point.