⚖️The assumption of constant price allows economists to study the effects of non-price factors on supply and demand.
💰An increase in demand should theoretically drive up the price of a product.
🔄Supply and demand curves can shift due to non-price factors, resulting in a change in equilibrium price.
📈Market equilibrium is the point where the quantity demanded equals the quantity supplied.
⚖️At market equilibrium, there are no surpluses or shortages.
What assumptions do economists make when analyzing supply and demand shifts?
—Economists assume that prices are held constant to focus on the effects of non-price factors on supply and demand.
How does an increase in demand affect the price of a product?
—An increase in demand should theoretically drive up the price of a product.
Can supply and demand curves shift due to factors other than price?
—Yes, factors such as changes in population or technology can cause supply and demand curves to shift.
What is market equilibrium?
—Market equilibrium is the point where the quantity demanded equals the quantity supplied.
What happens at market equilibrium?
—At market equilibrium, there are no surpluses or shortages.
00:05Economists analyze supply and demand shifts by assuming constant prices.
00:21An increase in demand should theoretically drive up the price.
00:24Supply and demand curves can shift due to non-price factors.
01:02Market equilibrium is the point where quantity demanded equals quantity supplied.
01:45At market equilibrium, there are no surpluses or shortages.
