Consumption - What is Microeconomics? Demand and Supply If prices for beef go up, people would want less of it If prices for beef go up, farmers would like to sell more Price · The above diagram is the famous“ demand and supply diagram” It is a model of the market for beef. The market price is p and quantity is q Consumption- What is Microeconomics? Equilibrium Equilibrium is a central concept. For example, it is the price and quantity at hich demand and supply are equal. In the demand and supply diagram of the last page p was the equilibrium price and q the equilibrium quantity. No-one wished to purchase any more at that price, and no farmer wished to supply any less- equilibrium Is that all there is? Well, no. But this is where the course is going The lectures on consumption lead to the demand curve. The lectures of production lead to the supply curve. Finally, the lectures on market examine equilibrium more closelConsumption — What is Microeconomics? 9 Demand and Supply • If prices for beef go up, people would want less of it. • If prices for beef go up, farmers would like to sell more. ................................................................................................................................................................................................................................................................................ . . 0 Price Quantity Demand Supply p q . . . . . . ............. ............. ............. ............. ............. ........... • The above diagram is the famous “demand and supply diagram”. • It is a model of the market for beef. The market price is p and quantity is q. Consumption — What is Microeconomics? 10 Equilibrium • Equilibrium is a central concept. For example, it is the price and quantity at which demand and supply are equal. • In the demand and supply diagram of the last page p was the equilibrium price and q the equilibrium quantity. • No-one wished to purchase any more at that price, and no farmer wished to supply any less — equilibrium. • Is that all there is? Well, no. But this is where the course is going. • The lectures on consumption lead to the demand curve. The lectures on production lead to the supply curve. Finally, the lectures on market examine equilibrium more closely