Search results
Results From The WOW.Com Content Network
Examples [ edit ] In the LM model of interest rate determination, [ 1 ] : pp. 261–7 the supply of and demand for money determine the interest rate contingent on the level of the money supply, so the money supply is an exogenous variable and the interest rate is an endogenous variable.
For example, an increase in supply will disrupt the equilibrium, leading to lower prices. Eventually, a new equilibrium will be attained in most markets. Then, there will be no change in price or the amount of output bought and sold — until there is an exogenous shift in supply or demand (such as changes in technology or tastes ).
Partial equilibrium, the equilibrium price and quantity which come from the cross of supply and demand in a competitive market; Radner equilibrium, an economic concept defined by economist Roy Radner in the context of general equilibrium; Recursive competitive equilibrium, an economic equilibrium concept associated with a dynamic program
The Price equation can describe any system that changes over time, but is most often applied in evolutionary biology. The evolution of sight provides an example of simple directional selection. The evolution of sickle cell anemia shows how a heterozygote advantage can affect trait evolution. The Price equation can also be applied to population ...
In partial equilibrium analysis, the determination of the price of a good is simplified by just looking at the price of one good, and assuming that the prices of all other goods remain constant. The Marshallian theory of supply and demand is an example of partial equilibrium analysis.
A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, [1] good, commodity, or service. It is one type of price support; other types include supply regulation and guarantee government purchase price. A price floor must be higher than the equilibrium price in order to be effective ...
The Bertrand–Nash equilibrium of this model is to have all (or at least two) firms setting the price equal to marginal cost. The argument is simple: if one firm sets a price above marginal cost then another firm can undercut it by a small amount (often called epsilon undercutting , where epsilon represents an arbitrarily small amount) thus ...
Walras's law is a consequence of finite budgets. If a consumer spends more on good A then they must spend and therefore demand less of good B, reducing B's price. The sum of the values of excess demands across all markets must equal zero, whether or not the economy is in a general equilibrium.