Price Theory: Supply and Demand

Second lecture in a price theory sequence: supply and demand as a model for how the price and quantity of a good sold on a market are determined, the types of competition the model relies on and why a large number of buyers and sellers is needed, the demand curve with its determinants and the distinction between a change in demand and a change in quantity demanded, and the supply curve with input prices, technology and expectations. Works through applied cases including frost damage to a coffee crop, oil, computer chips and the effect of policy on complements, and closes on the shifting-equilibrium problem where both curves move at once so that only one of price or quantity can be predicted from the graph.