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For the sellers if the price is lower than c then they will sell nothing. If the price is c or higher, then the supply equation states that sellers facing higher prices sell more quantity. Sellers' behaviour, as described by the supply equation, is that at higher prices sellers sell more quantity.

The negotiating process (in which price and quantity or both adjust) provides the mechanism by which, eventually, buyers and sellers agree upon a price, P*, and a quantity, Q*, at which they can buy and sell and thus complete the transaction. At the end of the negotiating process, the quantity demanded by the buyers, Qd, is equal to the quantity supplied by the sellers, Qs (at the agreed-upon price), and thus the market is in equilibrium. The mathematical representation of such a negotiating process is described in the following paragraphs.

At the agreed price, P*, the equilibrium condition of the negotiating process, the equality in the quantity demanded and supplied, is

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