Economics Lecture: Shifting Demand and Supply

Introduction

Demand and Supply Curves:
- Demand is downward sloping.
- Supply is upward sloping.
- Equilibrium: The point where quantity demanded equals quantity supplied.
Price Changes:
- Moves along the demand or supply curve.
- Price increase: Quantity supplied increases, quantity demanded decreases, causing a surplus.
- Price decrease: Quantity demanded increases, quantity supplied decreases, causing a shortage.

Demand/Supply Shifters:
- Five shifters for demand.
- Five shifters for supply.
Example from "Frozen":
- Market for sun balm.
- Season change (summer to winter) affects demand.
- Demand decreases (shifts left) due to season change, reducing price and quantity.

Task: Analyze six scenarios for hamburgers.
- Draw supply and demand graphs for each scenario.
- Determine changes in demand or supply, identify the shifter, and predict price/quantity changes.

New Grilling Technology:
- Affects supply (right shift), increasing quantity, decreasing price.
Increase in Price of Chicken Sandwiches:
- Substitute effect causes demand increase for hamburgers (right shift), increasing both price and quantity.
Price Decrease of Hamburgers:
- Moves along demand curve, increasing quantity demanded, creating shortage.
Increase in Price of Ground Beef:
- Affects supply (left shift), decreasing quantity, increasing price.
Human Fingers Found in Restaurants:
- Affects demand (left shift), decreasing both price and quantity.

Understanding supply and demand is crucial for real-life applications:
- Predict market changes.
- Useful for business and consumer decisions.

Upcoming Content: Price controls (price ceilings and price floors).
Resources: Review app for smartphones and tablets for further study preparation.

Application of supply and demand extends beyond academic purposes to practical, everyday decisions.
Anecdote about selling ice, highlighting real-world supply and demand challenges.