New answers tagged supply-and-demand
1
One minor point- it could be that the factory schedules labor and other factors of production (coal deliveries, etc) in daily increments, and therefore pricing is fixed within each increment.
-2
Demand is the maximum of Q if a person has the ability to pay as well as a willingness to pay. it covers the equilibrium of budget constraint and utility function. so, we need to know people's incomes, too. also, we should consider the price of Alternative and complementary goods affecting the studied product.
3
The production function has a particular feature: the inputs are perfectly substitutable. One unit of input 1 can be substituted by 2/3 of input 2 to produce the same quantity of output.
Intuitively, a producer would optimally use only one output to produce.
Suppose the production plan is $(z_1,z_2)$. By choosing $(z_1-1,z_2+2/3)$, the firm produces the same ...
4
I am unsure whether this qualifies as economics, but it would be something that might be discussed in business school. Furthermore, the answer is almost entirely engineering. As such, I will do this briefly.
Those “old” factories are probably in the same physical space as their current factories. They would need to build new facilities.
They would need ...
0
Let's assume familiarity with the S&D model's components for now. Imagine a seller comes to the market anticipating price A. (Their anticipation is wrong, the real price is equilibrium, found by the vertical height where S&D meet.)
They pay workers overtime, hire a few extra workers to produce F units, and this drives their costs up. When they ...
0
When the supply fully meets demand, there is no deficit of goods and price depicts Cost+General markup in the market. So the price is equal and fair for all participants of the market.
When supply is greater than demand, there are too many goods, so the price has to go down for you to sell goods and as a supplier you need to sacrifice either cost(quality) or ...
0
This four page reference shows how producer surplus is defined and calculated using integral calculus:
https://www.math.ubc.ca/~malabika/teaching/ubc/spring11/math105/surplus.pdf
As quantity increases from q = 0 to q = qe (equilibrium quantity) the price rises at each point on the supply curve S(q).
The equilibrium point (pe, qe) is taken independently by ...
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