Microeconomics Market Theory Essay
Microeconomics for Business Decision Theory of Market Demand: The quantities of a product that people are willing and able to purchase at various prices during some specific time period, sisters periods. 1 QED = f(Pix, ad, income (normal good, inferior good), Pother (substitutes, complements), consumer expectation, regulations, number of buyers,…… ) . All factors except Pix either shift or rotate the Demand for good x.
Therefore, the linear demand function or good x is written as QED = a – џPix or, a – boxed Consumer Surplus (2 0 in a free market): technically it is the area below a demand curve and above the market price. Pix It tells us that consumers in the market for good x are willing to pay the company(s) this much more (Consumer Surplus) of extra money. Demand is a function (a series of quantity demanded for various prices). Therefore, when price changes, there is no change in demand (when price changes, quantity demanded changes, not demand). Supply:
The quantities of a product that firms are willing and able to offer at various prices during some specific time period, sisters periods. 2 Ex. = g(Pix, input prices, technology, regulations, number of firms, producers’ expectation about the
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Microeconomics Market Theory By Shatter Market Equilibrium: BP (buyers are willing and able to pay) = AS (sellers are willing and able to accept) CB (? are willing and able to purchase) = SQ (? are willing and able to produce) 2 Like demand, supply is also a function (a series of quantity supplied for various prices). Therefore, when price changes, there is no change in supply (when price changes, quantity supplied changes, not supply). Total Surplus = Consumer Surplus + Producers Surplus = Total Welfare of the Market