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ECONOMIC SUPPLY & DEMAND - MIT OpenCourseWare

D-4388 1 ECONOMIC SUPPLY & DEMAND by Joseph Whelan Kamil Msefer Prepared for the MIT System Dynamics in Education Project Under the Supervision of Professor Jay W. Forrester January 14, 1996 Copyright 1994 by MIT Permission granted to copy for non-commercial educational purposes 5 D-4388 3 Table of Contents 1. ABSTRACT 4 2. INTRODUCTION3. CONVENTIONAL SUPPLY AND DEMAND INTRODUCTION 6 DEMAND 6 SUPPLY 8 INTERACTION BETWEEN SUPPLY AND DEMAND 9 4.

slopes upward because each additional unit is assumed to be more difficult or expensive to make than the previous one, and therefore requires a higher price to justify its production. Supply Figure 2: Supply Curve At high prices, there is more incentive to increase production of a …

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