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 - 19

If, on the other hand, your butcher only expects to sell 50kg of beef, and that the best price he will get is $6 per kilogram, he will only supply 50 kg (point J) that week.

He has misread the market however.

By Wednesday, he has sold nearly all his beef. At $6 per kilogram, consumer want to buy (demand) 150 kg (point M). What does your butcher do? He increases the price on his remaining stocks.

The butcher gets deliveries every week. His supply of beef is fixed in the short term. In an attempt to improve his profits, he will increase the price on his remaining stocks. If consumers do not buy on Thursday at the higher price, he still has time to lower his price on Friday. If he does not increase his price, he will run out of beef anyway.