Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
To: Elasticity

Market Equilibrium - 18

Consider the market for beef. If your local butcher thinks he will be able to sell beef at $10 per kilogram, he will prepare 150 kg for sale in a given week. Those who supply goods and services can never be sure of the level of demand.

Suppliers take risks.

Your butcher will carefully monitor the level of his stocks of unsold beef. By Wednesday, your butcher notices his stocks are much higher than usual.

It looks like he will only sell 50 kg of beef (point K) by the end of the week, and not the 150 kg (point L) he had expected. What does your butcher do?
He lowers his price for beef, in an attempt to get stock levels back to an acceptable level. If he does not lower his price, he risks making a loss on the unsold stock.