use supply and demand curves to identify market equilibrium price and quantity

Task 1: 300 words with APA references

Go to the internet and find a news article published within the last month that discusses changes in demand and supply of particular goods/services, summarize key points and post in the Discussions area.

Refer to week 2 content materials and use specific economic vocabulary within your summary, i.e. demand, quantity demanded, determinants of demand, shifts in demand curve, etc. Likewise with supply. Also you should discuss changes in equilibrium quantity and equilibrium price.

The article you choose may not use these exact terms; therefore, it is incumbent upon you to convert the article language into economic language as is appropriate.

Please note that the goal of this discussion is to read, understand, and discuss recent news using microeconomic terminology. The article should be from an on-line newspaper or magazine. Materials posted on educational websites, like www.thebalance.com, www.khanacademy.org , and so on, are not considered news articles even if they were recently updated and contain material related to the discussion topic.

Week 2:

Introduction

Week 2 study materials demonstrate how demand and supply curves can be used to model a competitive market for a good or service. After analyzing the factors that change the shape and position of demand and supply curves, we will show how a change in demand or supply changes the equilibrium market price and quantity of a particular good.

You will learn that as the price of an item goes up, the quantity demanded goes down. But by how much, and what difference does it make? Suppose you are a seller and you decide to lower the price of a product to attract new customers. When you decrease the price, you accept less money for each unit you sell. Doing so reduces your firm’s revenues. You hope to offset this loss by gaining new customers.

If buyers are relatively unresponsive to your new price, however, increased revenues from new customers may not offset the losses that come from selling the product at a lower price to everyone who would have bought it at the old one. It is important for a firm to know whether potential buyers will respond to a decrease in price.

Outcomes

After completing Week 2 of the course, you should be able to

· use supply and demand curves to identify market equilibrium price and quantity

· use supply and demand curves to illustrate the effect of a change in a determinant of demand or supply on the market equilibrium price and on the quantity of a particular good

· compute the various coefficients of elasticity, list their determinants, and explain their implications