Here you will be introduced to the ceteris paribus assumption, which is crucial to building correlations between economic variables. When using ceteris paribus, we assume that all variables – with the exception of those in explicit consideration – will remain constant. We will then examine the supply and demand models and the resulting market equilibrium that occurs where the supply curve and the demand curve intersect.
Upon successful completion, you will be able to:
- analyze and apply the mechanics of demand and supply for individuals, firms, and the market; and
- determine equilibrium in the market under various situations that either cause movements or shifts in demand and supply.