Show in a diagram the effect on the demand curve, the supply...

Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events. a. The market for newspapers in your town Case 1: The salaries of journalists go up. Case 2 : There is a big news event in your town, which is reported in the newspapers. b. The market for St. Louis Rams cotton T-shirts Case 1: The Rams win the Super Bowl. Case 2: The price of cotton increases. c. The market for bagels Case 1: People realize how fattening bagels are. Case 2: People have less time to make themselves a cooked breakfast. d. The market for the Krugman and Wells economics textbook Case 1: Your professor makes it required reading for all of his or her students. Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.

Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events.
a. The market for newspapers in your town Case 1: The salaries of journalists go up. Case 2 : There is a big news event in your town, which is reported in the newspapers.
b. The market for St. Louis Rams cotton T-shirts
Case 1: The Rams win the Super Bowl. Case 2: The price of cotton increases.
c. The market for bagels Case 1: People realize how fattening bagels are. Case 2: People have less time to make themselves a cooked breakfast.
d. The market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students.
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.

Key Concepts

Supply and Demand Model

The supply and demand model is a fundamental economic framework that illustrates how buyers and sellers interact in a market. It uses two curves—the demand curve, which shows the relationship between price and the quantity of a good that consumers are willing to purchase, and the supply curve, which shows the relationship between price and the quantity that producers are willing to offer—to determine the market equilibrium, where supply equals demand.

Demand Curve

The demand curve represents consumer behavior, detailing how much of a product is purchased at various price levels. It is influenced by factors such as consumer preferences, incomes, and the prices of related goods. Shifts in the demand curve occur when non-price factors change, leading to a change in the overall quantity demanded at every price level.

Supply Curve

The supply curve depicts how much of a good producers are willing to supply at different prices. It is affected by factors such as production costs, technology, and input prices. Changes in any of these factors not related to the product's own price cause a shift in the supply curve, indicating a new relationship between price and quantity supplied.

Shifts in Demand

Shifts in the demand curve occur when there is a change in any of the determinants of demand besides the good's own price. For example, changes in tastes, income, or the prices of complementary and substitute goods can shift the curve to the right (indicating an increase in demand) or to the left (indicating a decrease in demand), regardless of the existing price level.

Shifts in Supply

Shifts in the supply curve arise from changes in factors that directly affect the cost or ability of producers to manufacture and supply goods. For instance, technological advancements, variations in the prices of raw materials, or changes in production regulations can shift the supply curve. An increase in supply shifts the curve rightward, whereas a decrease in supply shifts it leftward, altering the market equilibrium accordingly.

Market Equilibrium

Market equilibrium is the point at which the quantity demanded by consumers equals the quantity supplied by producers. This intersection of the demand and supply curves determines the equilibrium price and quantity. When external factors cause shifts in either the demand or the supply curve, the equilibrium adjusts, reflecting a new balance of market forces.

Transcript

00:02 Now in this case we have to study the effect on demand and supply of equilibrium price and equilibrium quantity due to some events that are taking place.

00:12 Coming to part a, what it says, the market for newspapers in your town increases.

00:18 Now case one is salaries of journalists go up.

00:21 There is a big news event in your town which is reported in the newspaper.

00:24 This is the case two.

00:25 Let's look at case one, the salaries of journalists go up.

00:29 Now the initial equilibrium will be at point e.

00:32 Where the supply curve and demand curve are intersecting at the initial point.

00:38 Now what happens they say that the salary of the newspaper people have gone up.

00:43 So what will do the cost of production of the newspaper will increase.

00:47 As a result the supply of newspapers will reduce and supply curve will shift towards the left side from ss to s1.

00:54 And it will intersect the original demand curve at the new equilibrium point e1.

00:59 At this point the equilibrium price will increase from p to the p1 an equilibrium quantity will reduce from q to q1.

01:06 At a given price when quantity demanded exceeds quantity supplied a shortage is created which puts upward pressure on prices and hence the equilibrium price of the newspaper will increase.

01:17 Now the second case it what it says there is a big news event in your town which is reported in the newspapers.

01:26 Now due to this event many people will be interested in buying more newspapers as a result the demand for newspapers will increase the demand curve will shift towards right from dd curve to d1 d1 curve and it will intersect the original supply curve as says at a new equilibrium point e1 at this point what happened the equilibrium price will increase from p to p1 equilibrium quantity will also increase from q to q1 now at a given price when quantity demanded exceeds quantity supplied a shortage is created which puts upward pressure on prices and this leads increase in equilibrium price of newspapers.

02:04 Now coming to case two.

02:06 Now what is the case two? the market of st.

02:09 Louis ram's cotton t -shirts...

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