Curriculum Econ 101, Part 2: Supply, Demand & Markets
Econ 101, Part 2: Supply, Demand & Markets
How buyers and sellers meet in the middle - the forces that set prices, and what happens when governments or shocks push against them.
- The Law of Demand As the price of a good rises, the quantity people want to buy tends to fall - one of the most reliable patterns in economics. 📄 Read-aloud
- The Law of Supply As the price of a good rises, the quantity producers are willing to sell tends to rise too - the mirror image of the law of demand. 📄 Read-aloud
- Market Equilibrium: Where Supply Meets Demand Markets tend to settle at the one price where the quantity buyers want matches the quantity sellers offer - and pressure pushes prices back there when they drift away. 📄 Read-aloud
- Price Elasticity of Demand Elasticity measures how strongly quantity demanded reacts to a price change - and that reaction varies enormously from good to good. 📄 Read-aloud
- Price Elasticity of Supply Just as demand can react strongly or weakly to price, so can supply - and how quickly producers can ramp up output is the main thing driving the difference. 📄 Read-aloud
- Shifts vs. Movements Along a Curve A change in price moves you along a fixed curve, but a change in almost anything else moves the whole curve - a distinction that trips up nearly every beginner. 📄 Read-aloud
- Price Ceilings and Price Floors Governments sometimes cap or set a minimum on prices - and both interventions create predictable, if unintended, effects on quantity. 📄 Read-aloud
- Consumer and Producer Surplus Every trade at market price creates a bit of extra value for both the buyer and the seller - and adding it all up shows how much a well-functioning market benefits everyone involved. 📄 Read-aloud
- Taxes, Subsidies, and Who Really Pays Who a tax is legally charged to and who actually bears its economic burden are often two different people - and elasticity determines the split. 📄 Read-aloud
- Market Failure: When Markets Don't Work Well Markets are usually good at allocating resources efficiently, but certain conditions - like pollution, monopoly power, and missing information - cause them to fall short. 📄 Read-aloud
- Income Elasticity and Cross-Price Elasticity Two more kinds of elasticity measure how demand reacts to changes in buyers' income and to changes in the prices of other goods. 📄 Read-aloud
- Complements and Substitutes Goods that replace each other and goods that are used together affect one another's demand in opposite, predictable ways. 📄 Read-aloud
- Deadweight Loss: Value That Simply Disappears Deadweight loss is the value lost when trades that would have benefited both buyer and seller never happen. 📄 Read-aloud
- Supply Shocks and Price Spikes How sudden disruptions to supply, from droughts to wars, shift supply curves and push prices up, and why effects depend on elasticity. 📄 Read-aloud
- Black Markets and Rationing What happens when prices are not allowed to balance supply and demand, from queues and ration cards to illegal resale markets. 📄 Read-aloud
- How Expectations Move Markets Why what people expect about future prices can change supply and demand today, sometimes making those expectations come true. 📄 Read-aloud
- Price Controls in Practice: Capping Medicine Prices How India caps prices of essential medicines and medical devices such as heart stents, and the trade-offs between affordability and supply. 📄 Read-aloud