Discussion:
Objectives
Given the basic economic problem of scarcity, apply opportunity costs and markets, and examine how the price mechanism reconciles changes to either/both functions, resulting in a new market equilibrium price and level of output.
Enablers
• Examine the determinants of demand and supply.
• Differentiate between a change in quantity demanded/quantity supplied (a movement along a fixed demand curve) and a change in demand/change in supply (a movement of the entire demand curve).
• Illustrate how market equilibrium is reached.
• Illustrate the movement of the supply and demand curves and the resulting new equilibrium price and quantity.
• Evaluate the factors that influence price elasticity of demand and supply.