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ECNE610
Managerial
Economics
Week3
FEBRUARY20141Dr.MazharulIslamChapter-3
3DemandandSupplyDr.MazharulIslam2
LessonObjectivesTointroducesthetwomostfundamentalandthemostpowerfulofalleconomictools.TheseareDemandandSupply.Understandmarketequilibriumandhowthemarketpricesandquantitiesaredeterminedintheshort-runandlongrun.Explainlawofdemandandsupply.Explainthenonpricedeterminantsofdemandandsupplywithpracticalexamples.distinguishbetweentheshort-runrationingfunctionandthelong-runguidingfunctionofprice.Explainhowtheconceptofdemandandsupplycanbeusedtoanalysemarketconditionsinwhichmanagementdecisionsaboutpriceandallocationofresourcesmustbemade.Usethedemandandsupplymodeltomakepredictionsaboutchangesinpricesandquantities.3Dr.MazharulIslam
DemandDemandindicatesthequantitiesofgoodsorservicesthatconsumersarewillingandabletobuyatvariouspricesduringagiventimeperiodwhenotherthingsconstant.Ifyoudemandsomething,thenyou1.Wantit,2.Canaffordit,and3.Havemadeadefiniteplantobuyit.4Dr.MazharulIslam
MarketDemandMarket:Asetofarrangementsthroughwhichbuyersandsellerscarryoutexchangeatmutuallyagreeableterms.Marketsareoftenphysicalplaces,suchassupermarkets,shoppingmallsetc.Marketalsoincludeothermechanismsbywhichbuyersandsellerscommunicate,likeradiotelevisionadvertisement,telephonesetc.Therearetwotypesofmarketintheeconomy.TheseareProductmarketandResourcemarket.5Dr.MazharulIslam
MarketDemandThesumoftheindividualdemandsofallconsumersinthemarket.6Dr.MazharulIslam
QuantityDemandWantsaretheunlimiteddesiresorwishespeoplehaveforgoodsandservices.Demandreflectsadecisionaboutwhichwantstosatisfy.Thequantitydemandedofagoodorserviceistheamountthatconsumersplantobuyduringaparticulartimeperiod,andataparticularprice.7Dr.MazharulIsla
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