enlivo

Date
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MObLE - 1

eCine
elnekiciky
Peice elasicik op clemand & inLeme
olemand, Ecplalo Ncei@ug cletetminent
pice elaahicikyop clemanol
LNTRODuCTIONN

Demand te the quankky_ofa cemmodik cohich

tuye clesihe igable uilBog to u y
at a uen ace at a u e n pont e time

LOuw 0p clemcnd ecploin that shen othex_clemaunol

elekeumaanta Che CSSumeol o be Ce0steat
as pice oalle clemonoteocpande& 0Spoaiee
loige olemono contteucta But i t cloes mot state
pe0panien olemcnol eependla
bu- Lohat
Conttacta he_Con.cept Of edceeloslicit
Op clemaLno eeplaio

DefINATTON
uce
elaslicilu olemonodl ameasuaement
lo bhe chanAe inCongumpkoa p a phoduuet
helatiek to Chunge n lap9iceIE
as pice eloskieik op clemand

suce lealiciky 4 Change in uontly Demaad

DemoLn ol Change in Pice
 Date: *enlivo-
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ncome Eloskcky
émand
AsBice
As
i thecause p change in
clemad
Same 10Come eloski city Op clemandiS
uGeul o ne cSuAe
chonge inthe clemand
Commoclily uoth 9hespecE to Change
the Yncome CONSUmeh_
Locome Change io clemand
Eloeticiy To hange i Lousame

ETERMTNANTS NE KEMAND

Koice
Toceme op buyer
3 nice helatedgeeds
Tasle Paepenance
5 Luuae eepectotieng
G Acweutiement & RMomatio
HOUeuAment Peliclea
8 Culwe
becsen
oney Cinulchion
What is the aw duppl Lehat 0he the
he
eletesuminanta Suppl
NTRODLCTION

láuecuuclisq ia the qankikyop goods ealed

D the auailalbfe Paclobs OP puction duoina
cloceal peuool
Lwheueces upply 14 theamount pphoduolian
shich a to
ig able Btsiingto
Sell a the masuket ot o guen
at a paultouloy paint ap Hme
Supply cshot fbe Selle ig olale 3 Loilling
tsilling
to Bale The qLLantiy Suppilied is
LmALnE
p a peulleuulo Commodiy bhat
aplim iscuLlng c.ble ko opp ase Sale
ak Aautloult Redee cluunggluen Bome

Aud poly
"hen all othe Pacloeappeclino aupplyare
pefee
aS3umeol to be Conskant
& 0s Psdce
intueasea &uppl Caepand3
Contteebs " Thus theue s
deoveose Supply
a posiHue ShelaHonship bekuneenpuce &

Supely this ela Eenship s_called

Laus Suppluy
eladedo
lhue OuLe Cehaia aseumptions

Lou Sopelt
 enlivo
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HssumpHen Lauopcuppy
he Lau op Supply- CRume3 the eeot
o pa l PoLokan3 Otheu thon Puce s
Cnskent the Supply a t aguen
pesin time Acualuy Some op
he
othex fanla houwe a maHe eeeuino
npence Bupply han kce
Lmpaulent Oeumpkoj3 He

emaos
ice opprcoluokiol

Constoat

heueisno hanged nthe eLalenk glate

op teohnologs
Level op Compelikloa 9emalnA theSeme
Gno Opgeley inthe
Othey tOOkea
maulee Lemaun3 Seame
onaheal
fuluue Puee eCpeckehonQue

Otheu faolots k e Qoveument pOy-

tandport foLaile nakumal PoLokas ele
uemaln9 Coakant.
 clASSMAt
Date
Page

30

900 Boo
Supply OpCommocliky (kg1

theiaheue diogreumPie oP Csmmolituy s

sepresenkedl on N åSupply op Commocliky fs
CLDe13 otinq the grephOp abeue
Lecble gves p a l n t s a Cel, e hicb
3houe the
the uasiouapsice &upplyCombinalhe16.

ohenu o e g 60 Supply ig 200 kaOhen

ce Hee to 6o, Supply ecebends to oo kq
&0shen ucehse siU fthe to 1 0 ,
ecetenols toGoo kas &u Se os
Supply Cwe
The 83 9Coulleo Suppl C we
po3ithue Stwpe
 Page
MobuLe -9

& hat C Psissoes olilemma n eligepely

makeb 9 Do usu think pusen0 \3 0ulemma
s Heleuanb Locdu s made CLOnemy
Ans nto cduebien
he sdeenes dileanma besically Proude a
hemeuOFK as unoleStoncling houo to 8bike
a balonce bekuoeen CoopeeakHon Cempettien
e OCaellool foe thakeaiedecislen
makin
A Poisonos. 3 oilemma deseuube a 3ituolien
oheue a000reling to ame thephy ftoo Players
acHpg selehly tullimalely 97@ub
toill
SubopHmal chorcepoh beth.
the 9uscoe cilemma also shous La theut
meue Co-opesahoo not aluays o one
beatinkeuet

CONCEPT -

The uSooe 3 cblemma Scencurio c90AK as

ollows lwo Suspeebte baue been QpPkehenoled
Cuime Sepanote
9200m na pelice Steuhon sitb momeans
Dpcemmuniccing coth1s Cach_Other h e
hes 6epauoely bold hem
o secuto
he follouing
o Loslpy againDt.
You Confes &aghee does 9not Csoleas
oth e Suspeot - C o h o
Hthe
 Date:
Page.

RTeONER B_
ReONGRs ReMALn
DTLEmmA CONEEs BILEN

A
CONEE
b yeam 5yec Oyec 20 eos

RemALnl LA Le LA B
STENT
12oyec Oyeor Yecu Neoa

he membeH P a n Ollonpely ican poLcea

Poooe 8 dilemma olso
he oigepelieta Coopeuotes nboleling
dousacoulput lCpaeas Ehen hgh monopaly
oot oe po3aible
h e oill mot Coopexale thenall
have Suer

ONCLUISION

usone 3 oilemmea i3 applicohle in 9ea

Lndeu Dhot Conditien3 JlL Co-Opekatien

in Caoist
emeuoe
coithet a Centtal Quthosily
 Date:
enlivo
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he all knDu) hat pesples Oue not Ongols

& they Leno to oalk Pøt thems@leues
the Pusone dilemoma as a
mean4 O LLodleAtancllng nany GEa eonld
BttaAon3 baacd
uat As Ynaliuiolual eing Sellish Lenda
te bene Alts L1e at leoat in shat teum
But Oheo CueuyOAe_ 3elish, eueusone
Sulex&
00
 enlivo
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Page:

beluueen monepaly &

N2Ecplaia
monope-UAtic
the olppeuencee
ComypeHol
i t h apphopdale

Butable CCOLmpies
diagtam &

LNTRODuCTTON
mowiket &ttuetusie
loooply SepeLs
theue i 0 Single- Seller olemlnatea
wbeue
his inlQue
the chale manKe
leroeluetE
by
by Sellag

McnOpeti3Hc CompelLian heleus the

Compe HHa maukeb_ A9heueln_eu Bellers3
the mamldeE Bubstuhe
the Cu3kome4S

maukek e0notjuet apla0e

heueby peLLLe3 engoge cchaage
gones3 Seuwic23 mon@ buut
a Byakem Lheueio heue
OLuemaLny Duyeu3 Selleu
PuDou Seuwe
haula9 COmplek
knowleolge abouut TmuldeE
CenaHons
csho beugain SCHHe he
he psLoduet to mouke he aleal
 enlivo
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eEcRANCE BeTEUEEN
ONOPoLy
Monop.blu Feleusto
MONOPoLTSTC.
a opopelisHc Compellon
mau&et Stuohsie T3 aCesmpettue_mcke
0oheue Single Selle SelingCoheuoln heue
Locluce Sell oduet laue many Sellesa Cho
lo -losQe nuumbe_ of Cho
dipexenliakeol
buue Kroeluot to Lo
buyeh13
oonPaly i s a Single MonopolistHc eompetitien
Ploue maaket T& pond Yn maulaet
DP a Small umbey
A plauyons Theue oill
be ecesBceily
han ope entiky.

he Selle io a moonpaly teu Playe:9 phegent

mauket cloe3 not_ 1 amonopalisHe manke
Pepeiente any Theue eeist minial
oapeHloa. CompeloN_among hose
Hlouye3 i hat mcuuket

IoAmonDpely masuket|lheCims olo mot cnert

desmand 8 Supply aselontte oue demand&
entlroly Calibraed by uunpy oiing ta the
he pikm s CompeHHon belwcoN
all the moheikely mauleF plauyCa.
hat skewcol in
that seller
 enlivo
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Caiueathe Gnalute Of
Ehe mauket both entyCompektlon in a
& eeisk aue ollppiculEmooopatialie MaulkeE
entty- XLeersiOLe
Orelaluely easle

he ecialence fa De l o the esence

mullple enttie3
Sole playeyin a
monopoly_mauldeli_ause lin tbe muldeF
bLye heteio buLeye baue Bhe
ControlL OUeL ptoolual Capluon PPuChasinq4
pHees. hepHee Quotelthe phooluof
Dy h e Selle Coill- Seuiee at a
lhuwe b eacmeplkd CompeHtlue Bucehia
by buLovsS faola isLelkca
into Consioleuallag
ohen Arms engoge
ln the Ruieing
thelr Koduot
Seuulee Hene cue
o awilaluliky
pHon buyexg Ca0
iOAlueo.ce tne plee

RuooluokValants aS.eDemand to mbuue s

the Sole dieuette end ustually leads
paSeller hese s maulaeB playey to
n eekeunal faelah Loundh ollppeuent
bat Cold ausce 9EJouuHesep afhodugt
o Conaioleu Ceekendng on cte May
the uauiely f froduetlalso amouat o be
fpeu
 enlivo
Date

Page 23

a duenkiainq facloe
O m iits Ceompelitahs

ebuot Pealicheslky aMaoe umbex cp Plauy eh

bigholue to he in
amonopoushe
eBenO Oe 2ay ooemaslket melkes roeluot
Selle a monopoly eclietebili' oo

One Coa teveahiok clothinq&estcuuants

the inteuoet layoutF Con be oNgid ey
o0qle Monopolisuc moulk@E
e Compeltose. IBecouuse inm3 bauwe
Phoolucts
hie osop &Yohoo butcipeeLLentioed
hey veuy Smau mouul@ Poeu
moLlke 3hote S0
Cooole Can_be Conside
Rn moDopeGku nankek
 Date:
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DrauRm undle YNOPbLY omPETTTION

Supetnotma

MC
Propit
AC

mR AR
AR
Oulput

Heue Mcuaioal Revenue Aueuage hevenue

mcnanal CosE
Shoee0
 -enlivo
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Page

ARAM nder DstofrLTSTLC DMPETII TON

LRML

LRAC

Demond Othe

Heue LRAC Lon4Run Auege Cos & LRMC

long
Long Run iMcuglnalCost_elemanc Cuve
maqinal euenue auen
 enlivo
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Q Colculahe omalal CDe Real ODP á the

CADP Declat HOr ecLoh eCUn ing 20LS
as he bese yCCN
Yean ulce dduaaik ee fex
aeeeBreao O brecd Paaket op Cookies
PoLcke Pro. CoolRles PoLeket Pre.
9016 20 22 200
22 220 95 300
2018 26 2% 950

Nomina CouP

ens Koulce A a n t Tot

Breao LCooldi
2016
22 220 + 25 x3oo J 12340
2o18 26 x 200 8 X 950)= 19200

Real uDP

eas Bread Cookiel 7

2016 4
 nlivo-
Date:
Page:

2o11 20 x920 + 22 X 3 oo ltooo

201& L20 x 9n0 99 x950 9500

3 GsP Deplatoh
Womloal CouD y 100 CDP delato
Keal CoiDe

2olb
2611 12 12
201S 2

X
 enlivo
Date:

Page
MoouLe -
QLlcohy doea h e phil@ps CurUe become Vesukical
Diseue9 shant unttade- Opp bekocon
intlediea unemplOLmenb

NTRODLOTION
The phillips Cswe llusttakes hat Eheue Ys
an nueuae 9eloHio.ahio bektocon tunemplou.omenk
BfnloHen Yn Lhe Bbat uun but
Gnot o Lon nun he epnOmy
aluidyas opeaia Bomeuobeue O0 the
Shoat u a phillips Lnue because he
epresenk euenh Combìnakio1 op laion
& LnemploumenE

Phillpa Cuwue Become euHcal

he phillip9 Cuuue clepicle the nelaonship
belewee unemploumenE ntatod
SupposBe the goveunmeat PuuSe3
Pae pan8ionaAy poly Leg loweu ipkeseat
oes lalno
Ualng-
demand
he Classicoa model op
aophecale
Ehak
& bupply Ce
CcA See ncueane
aategoke demand Coil 2result Pn a a l l
0 unemplou.meAE C
intla Lien
Howeue accoding ohis theony Suah eull
n unemployment 1 Only empotahly
COOrkeHa Cwiu
beajofo eepeok
ulee ice nise in the Auusre
So wil demcnd hiabe L9OLQC23
a Lekuoouo hipE the shant
auO Aggeqole ueply Ausaue 2resulhing
the iniNal leuel
UnempltoumenE but ouE a hiahe puce
Level la ia Shouan by a ahkuocud
8hipk fn 3hast Run Phillps ue lSReCI
Hente we COD 3ay thot fo the lone
u the philllp3 Cuunwe AADill be
ehtoal becouuse itteapeOlue p the
Leuel CLnemplou.ment
Onckuual ee

DuARAMATIC KEPREAENTATToN OF Lon

Long
& 6t0Rt-RUN PHTLIps uRVE

Lona u Philips Cu2ije

6
Shio_nu Philip3 CueH/e

2 A

unemploumen
Rouhe CTo
 Date:
enlivo
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Shoat Kuun_roale.c
Seween nlekion
Unempleyment
Hs Phillps Cuwe Shown n above
cohieb depicte inyenSe diegam
bekuoee SnelaHonship
Talaion &L unemploument
unemploument decuecse inlaon inchec.se As
ice - veusea

he
hePhillps Cunve elakes he noe Of
alaia Lith_ the ote e nemploynen
he phillips CunueOMOueg that nemployment
& fnlotion CuHe inveusely Selahed
As Lével of
LLoenmploymeat decueo3e
inCHecse

Relaionship 3 not oech

taphlcally Shott un thocle opp bekween

olatioa unemplOument 13 shous0 i
above diagram As One fncuecse ,other
must decuedse
L tbet mege a N economy Cun eithen
Cxepeuieoce 9 unemployment at the (ost
ep 6 Y Pallates
|unemployment to 5 to bhng dousa
the inloHen euel 2
 Date

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LONNCLUSTON
Heoce Philtipes CLSUeshouws he 2elaktonship
behoee_ inlolen KL CLnemploument
To the Short faklaHo1 & unemploment
nuewsely elakec Q6 Ope
uoohy incueo0 the othe decre0Se
Long hua Lhue tede

We haks is elaion
&Uolue op money beloeen euel BleeG
h a t is the
Yncuease inthe money
Supply On the piCe Value op
money
LNTRODuCTTON
he aU euoL@e
the Seo Lewel leuelof the Sea &Coll iE
f0on.ey 1S a Commocliy acoepkeol
eneual Consent b
econdmic medium
emcbanNGe
meoltu Ohloh
Oue CpreARed_ Pree å oulues
 enlivo
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Page - 25

Kelolisn Keluwoen ice Level& alue op

e.ney

hen
Loheo the
he ice Leuel uaes money Cáo buy
ese Qoools & Seuwlce9 50 we Beuy that
PuLohasina PaDe bos Qeutlen

Conueusety Lohen fiee leuel alle money Can

buy mOre C O Say ls hichosing
Poue b QO0e up

hus Ehe Wolue op Money Changes InveSely_

toith Ehe ice Level oCuea5cd by by-
abo Lroo Y dueing oanlolcan belocen
he Uoulwe all
y he Same peuentoqe

Changes in he Tolee Level

hangee in he Change in theSupply

Supply Of mOney goods& Seavice

ohen he Quanliky f money

oiCulatoo) COuntty inCHeaSee
Le.g pHOEin ne notes mahe
Ooney auclable to the people
making pLuHhese Ehe demand
 enlivo
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Page

g o o o s & Seuuioe Qoes lup & he

pe leuel Lends to use
CopueuSely the Supply- money
decuease People Coul Lee
& price Lewel Lencla to go doeo
Apaia Y theue 13 an inueohe
Spply- Qoola3
Sewice the Pree Leve onds to
ell Cunueu8e Cas0 E tend

he iEheSupply Moneyincsea40
95 &U the upp y efgoools
SeuwleeAClSo inece
he Same 951 then coi ndinaay
be Ono eeotbo the priee leuel
heue Otheu faalots ohieb
Luence the HCe
leuel e g , the
nLmbey Hme money ChangS-
haoola the Ueloeilay

money paiol
to thoe Lwbo
Nolue _Op
ConSuumable
lompele Yan ooel Sewloe
Cool2 Seuulel
Moudket
Podce
 Date:
Page:

Rthey Cao
t_appord
t
Ciky
fo Uue io Othex
ff epeu Lo lue Loith Eheir
ethoc
l Discuuminalhen agodnak he fn otber
Oueas
Kemembey henta Paid e Ue
Peunent Pemples lncome

oLUMON
-> uket eQLullbum tadepined as the
Slebtee Sleke p the
the manlAeF Oheue_
the demanded 1e equal to
he quOLAMky h pE uppilieol at the
PreuoiUnq Priee3.

o he Qiuen case both demang &

LLpp L00ulor bed elokiuely nelaakHC
Demanded Yo elaluel fnelaatC becauuse_
hei QuOh03lnq PAwey S Veu Lot9
thout cant ord o ue n
hat

Another ebo0 S Aelakuely nelaste

demano is due o the Socla isaue
As they want Liue Cith thel Un
ethaie & al30 diScuiminakes
QgaiosE them othey Oea 50
 Date

Page

the demouno
Opoutment coill Leno to
Conslaot aue to hgioliky Yn migration
ohea diSCus iltuokio0 op Supply f
apoukenls theo t al60 be 2reloluely
ToelaaEC due the fncome leuel
bepcOC rent high o thot 0heo
Peple end fo leauethat
LOL
ukwre, the focome
CLH@OL eetlelGreup Shlpk clue
Se Theue RoCe
nuch ree Proboubly
Land auAullable
thot Che
lcOdlo
Suppilieo
ncueoAe ments builelinng
pcutmenls fn lou ncome ates
not a g0oo Toueskment
pautmenl OusDe0u

Sualion Op Lese B
Hseume LOUN unment Cuete8 ent upailieo
Keqrame ren er e equreo to Peu
bo Toeomne in Aent
Any aololilional rent isPovdby goyt.
Coc incomne feueo0 COiHh aLo niome
Ra mooth CoOulo be
reuureol Po RA Beoo fA Tent
L30
the residua 2000
 enlivo
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Supply

Demandlg

Heue in Cboue diagram

duonkiky f3 shoe
Puce Shousn Yaels
when oveuOment pys ha
hen theue
Of rent Kee
shiph olemand Cunvee
Crem dp toda
Supply onsisfent ittegpeokiue
change olemand