We are done with TOPIC 1 lecture + seminar analysis!

For SUPPLIERS: when price get higher = supply(production) increases

Affects to supply:
1. Price changes
2. Cost of production

For DEMANDERS:

Affects:
1. When price decreases = demand increases (highlighted curve)
2. When income is increasing = demand is shifting (punktir)

When price increased from 100 to 110 = Demand decreased, Supply increased => Surplus

When price decreased from 100 to 90 = demand increased, supply was not enough = shortage

so we need EQUALIBRIUM

Perfectly elastic => when price changes even for 1% the demand becomes 0. When price decreases even slightly = demand increases rapidly = shortage.

1st example

No questions about Lecture?

We are moving to seminar questions.

Question 15 (Seminar 2)

Question 16 (Seminar 2)