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A Primer on Macroeconomics by Thomas Beveridge

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Modeling the Market

We can now examine how participants interact in a market. Table 2-3 and Figure 2-7 combine the previous demand and supply schedules.

Table 2-3. Adjustment to Equilibrium

Price

Quantity demanded

Quantity supplied

Result

Price Pressure

60¢

300

700

Surplus

Downward

50¢

450

650

Surplus

Downward

40¢

550

550

Equilibrium

None

30¢

650

450

Shortage

Upward

20¢

800

300

Shortage

Upward

10¢

1000

200

Shortage

Upward

58675.jpg

Figure 2-7. Adjustment to equilibrium.

When the price is 60¢ per apple, quantity supplied exceeds quantity demanded and ...

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