#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 #summary
The basic model of markets is the demand and supply model. The demand function represents buyers’ behavior and can be depicted (in its inverse demand form) as a negatively sloped demand curve. The supply function represents sellers’ behavior and can be depicted (in its inverse supply form) as a positively sloped supply curve. The interaction of buyers and sellers in a market results in equilibrium. Equilibrium exists when the highest price willingly paid by buyers is just equal to the lowest price willingly accepted by sellers.
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SUMMARYay’s global economy, an understanding of the demand and supply model is essential for any analyst who hopes to grasp the implications of economic developments on investment values. Among the points made are the following:
<span>The basic model of markets is the demand and supply model. The demand function represents buyers’ behavior and can be depicted (in its inverse demand form) as a negatively sloped demand curve. The supply function represents sellers’ behavior and can be depicted (in its inverse supply form) as a positively sloped supply curve. The interaction of buyers and sellers in a market results in equilibrium. Equilibrium exists when the highest price willingly paid by buyers is just equal to the lowest price willingly accepted by sellers.
Goods markets are the interactions of consumers as buyers and firms as sellers of goods and services produced by firms and bought by households. Factor markets are the i Summary
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