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Willing and able to purchase a product at aparticular price

How many of you would like a camry [or likevehicle]?How many of you are able? How many of you are able?

Whats the difference between willing and able? Idea of time and place at this time, you may be

willing to buy a camry, but are not able, thereforeyou do not have a DEMAND for a Camry

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Demand schedule: A table that lists at variousprices, the number of items demanded.

Demand Curve: the graphic representation ofdemand.

Graphing a Demand Schedule:

1. The lower left quadrant is 0

2. The vertical axis is price

3. The horizontal axis is quantity

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As price falls, the quantity demanded increases. Asthe price rises, the quantity demanded decreases

P QD

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Qd = 100 10PQd = Permintaan beras (kg)P = harga beras/ kg (rb rph)

HargaHarga (P)(P) Kuantitas (Qd)Kuantitas (Qd)00224466

100100808060604040

P

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881010

202000

Q

D

8

4

20 60

QD = 100 10P

0 100

10

Skedul permintaan

Kurva permintaan

Price per pound of Quantity of CoffeePrice per pound ofcoffee beans

Quantity of CoffeeBeans Demanded(billions of pounds)

$2.00 7.11.75 7.51.50 8.11.25 8.91.00 10

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Change in Quantity Demanded: Caused by change in own price of good Movement along the curve Movement along the curve

Change in Demand: Caused by Change in determinant of demand Shift to new demand curve

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P1. PenurunanTingkat harga

P1

Ceteris Paribus

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2.meningkatkan kuantitasbarang dan jasa yang dimintal

Q

D

Change in Quantity Demanded

P2

Q1 Q2

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Q

D

Change in Demand

P

Q1Q

D1

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Q

D

Change in Demand

P

Q2 Q

D2

PD

P D1

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Q

D

Change in Demand - Caused by Change in determinant of demand : Income Prices of Related GoodsPreference/taste Consumer expectations Population

Q2 Q

D2

Q1

Income Normal Good: a good for which demand

increases as consumer incomes rise (ex. milk) Inferior Good: A good for which demand Inferior Good: A good for which demand

decreases as consumer incomes rise (bus rides) As income rises consumers tend to switch from

consuming these inferior goods to consumingnormal goods (ex. steak, car/plane)

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Preference/Taste Likes and dislikes in consumption

Consumer Expectations Change in future price of goods Change in future price of goods Change in future income

Population Change As the number of consumers in a market changes

the demand will change

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Prices of Related Goods Substitutes: Goods that are related in such a way

that an increase in the price of one leads to anincrease in the demand for the other [goods thatcan be consumed in place of one another] (Pepsiincrease in the demand for the other [goods thatcan be consumed in place of one another] (Pepsiand Coke)

Compliments: Goods that are related in such a waythat an increase in the price of one leads to adecrease in the demand for the other [goods thatare normally consumed together] (coffee andsugar)

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2 Related Goods

2

Compliments Substitutes

0

0,5

1

1,5

2

6 7 8 9 10

Demand

0

0,5

1

1,5

2

6 7 8 9 10

Demand

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What Makes A Producer Provide theQuantity of Goods & Services?

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Supply indicates how much a goodproducers are willing and able to offer forsale per period at each possible price,sale per period at each possible price,other things constant.

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As a goods price increases(decreases), the quantity suppliers arewilling and able to supply increaseswilling and able to supply increases(decreases)

The quantity supplied is usuallydirectly related to its price P QS

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A Supply Schedule displays the quantity of aproduct supplied at each price

Price Bottles Supplied

2.00 11.62.00 11.6

1.75 11.5

1.50 11.2

1.25 10.7

1.00 10

.75 9.1

.50 8

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A Supply Curve shows a graphic representation of thequantities of a good supplied at various prices

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Qs = -40 + 20PxQs = Penawaran beras (rb kg)Px = harga beras/ kg (rb rph)

Harga (Px)Harga (Px) Kuantitas (Qs)Kuantitas (Qs)66554433

8080606040402020

P

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3322

202000

Q

6

4

20 60

Qs = - 40 + 20 Px

0 80

2

Skedul penawaran

Kurva penawaran40

Change in a goods own price causeschange in quantity supplied

Movement along the supply curveMovement along the supply curve Change in supply caused by change in

determinant of supplyShifts supply curve

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P1. PenurunanTingkat harga

S

P1

Ceteris paribus

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2.menurunkan kuantitasbarang dan jasa yang ditawarkan.

Q

Tingkat harga

Kurva Penawaran: menyatakan unit barang atau jasa yang akan ditawarkanoleh produsen (Qs) pada berbagai tingkat harga pada suatu periode waktu.

P2

Q2 Q1

PS S1S2

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Q

P

Q Q1Q2

Technology If more efficient technology is discovered

production costs will fall So suppliers will be more willing and able to supply So suppliers will be more willing and able to supply

more of the good at each pricePrice of Relevant Resources Those resources employed in the production of a

good.

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Prices of Alternative Goods Price of good that use some of the same resources

as used to produce the good in question Producer Expectations Producer Expectations

Shift production according to future prices Number of Producers

# of Prod. Increases # of supply Government Restrictions

Taxes, quotas, licenses, etc.

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Demand & Supply at center of market Mutually beneficial for demander & suppliers

to come together and make exchangesto come together and make exchanges

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The costs of time and information required forexchange

Example: You are looking for a summer job. One way is togo from employer to employer looking for openings. Bothgo from employer to employer looking for openings. Bothtime consuming and could take extensive travel. A betterstrategy would be to pick up a couple of local newspapersand read through the help-wanted ads.

Adam Smiths Invisible Hand brings these forcestogether.

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At equilibrium there is no inherenttendency to change

Equilibrium

0

20

40

60

1 2 3 4 5

Quantity

Pric

e SupplySeries2

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When the Market Wont Compromise

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When the quantity supplied exceeds thequantity demanded

Surplus

60

0

20

40

60

1 2 3 4 5

Quantity

Pric

e SupplyDemand

Surplus

What is the amount of surplus at $40?

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When there is an excess of quantitydemanded compared to quantity supplied

Shortage

0

20

40

60

1 2 3 4 5

Quantity

Pric

e

Supply

Demand

Shortage

What is the amount of shortage?32PIE-w3-mna

Price tends toward Equilibrium

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EquilibriumEquilibrium

020406080

1 2 3 4 5

Quantity

Pric

e SupplyDemand

Demand Shift

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EqulibriumEqulibrium

020406080

1 2 3 4 5

Quantity

Pric

e SupplyDemand

Supply Shift

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Approach to Analyzing Changes1. Determine what changes: demand and/orsupplysupply2. What direction is change: increase/decrease3. Find new equilibrium price/quantity

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Concert Tickets

050

100150200

Pric

e SupplyD1

D2

What is the initial Price Equilibrium? What is the New Price Equilibrium? What factors (determinants) may have caused this

shift?

1 2 3 4 5

Quantity

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Subsidies to Public Universities

050

100150200

Pric

e S1Demand

S2

What is the initial Equilibrium Price/Quantity? What is the New Equilibrium Price/Quantity? Why would the Government get offer subsidies to

Universities?

1 2 3 4 5

Quantity

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When the Government Gets Involved

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A legal maximum that can be charged for a good Results in a Shortage Ex. cement, credit card interest rates, oil

ShortageShortage

0

20

40

60

1 2 3 4 5

Quantity

Pric

e SupplyDemand

Shortage

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A legal minimum that can be charged for a good. Results in a Surplus Ex. minimum wage, milk, sugar

Surplus

0102030405060

1 2 3 4 5

Pric

e

Quantity

Surplus

Supply

Demand

Surplus

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1. Kasus pasar mobil sedanPermintaan: Qd = 200 10PPenawaran: Qs = -40 + 5Pdimana: Qd, Qs = ribu unit per tahun.

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dimana: Qd, Qs = ribu unit per tahun.P = puluh juta rupiah per unit.

Ditanyakan : Keseimbangan pasar?

Keseimbangan Pasar:Qd = Qs

200 10P = - 40 + 5P240 = 15P

P = 16P = 16Maka: Qd = 200 10*(16) = 40

Qs = - 40 + 5*(16) = 40Jadi keseimbangan terjadi pada saat harga mobil Rp160 juta per unit; serta jumlah permintaan samadengan penawaran yaitu 40 ribu unit.

43

160

Qs = -40 + 5P

200

Harga(juta rph)

E

S

180

140

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80Qd = 200 10P

200400 Kuantitas mobil(ribu unit)

D

140

2. Kasus pasar gabah.Permintaan: Qd = 2000 3PPenawaran: Qs = -500 + 2Pdimana: Qd, Qs = ribu ton per musim.

P = ribu rupiah per ton.

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P = ribu rupiah per ton.Ditanyakan :1. Keseimbangan pasar?2. Bila pemerintah berniat menambah jumlah gabah

dengan menetapkan harga dasar 600 ribu rupiah per ton,apa yang terjadi pada pasar gabah tersebut. Apa upayapemerintah untuk menangulangi hal tersebut?

3. Kasus pasar tenaga kerja.Permintaan: Qd = 20000 0.6PPenawaran: Qs = -5000 + 0.4Pdimana: Qd, Qs = jiwa per bulan.

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dimana: Qd, Qs = jiwa per bulan.P = upah per hari.(rupiah)

Ditanyakan :1. Keseimbangan pasar?2. Bila pemerintah menetapkan upah minimum 30

ribu rupiah per hari, apa yang terjadi terhadapangkatan kerja (pengangguran)?