Professional Documents
Culture Documents
BY : GHALIB HUSSAIN
Discuss equilibrium price with the help of demand and supply under following conditions.
i. Market Period
ii. Short Run Period
iii. Long Run Period
The short period supply curve (SPSC) shows that, in the short
period, supply is able to adapt itself somewhat to a limited
extent to the changed demand conditions. The new demand
curve D1D1 intersects the SPSC at OP2 price. Now the
quantity supplied is OM1.
The new short-run equilibrium price becomes OP2, which is
higher than the initial market price OP, but it is not so high as
the second market period price OP1. The short-run supply has
also increased from OM to OM1.