IB Economics Unit 1:Competitive markets

Revision notes on the first section of the IB economics syllabus, competitive markets. Explanations of key concepts and diagrams, including excess demand and supply, equilibrium and allocative efficiency. There are notes on both the standard and higher part of the course and it has been written to the syllabus points. The higher parts are indicated by a dashed line along the left side of the page. 

HideShow resource information

Pages in this set

Page 1

Preview of page 1
1.1 Competitive markets: Demand and supply


The non-price determinants of demand

Page 2

Preview of page 2
Linear demand functions (equations), demand schedules and graphs


Page 3

Preview of page 3
The non-price determinants of supply

Page 4

Preview of page 4
Linear supply functions, equations and graphs

Market equilibrium

Equilibrium and changes to equilibrium

Page 5

Preview of page 5
Calculating and illustrating equilibrium using
linear equations

Qd = 50-5P Qs = -10 +
Qd/Qs = 0=50-5P 0=-10+4P
0 5P=50 10=4P
P=10 P=2.5
P=0 Qd=50-5(0 Qs=-10+4(0)
) Qs=-10

Page 6

Preview of page 6
Calculate Pe Calculate Qe
50-5P=-10+4P Qd = 50-5(6.67)
9P=60 Qd=50-33.33
P$6.67 Qd16.67 units

Excess supply

Qd=50-5(8) Qs=-10+4(8)
Qd=10 Qs=22
units of
excess supply

The role of the price mechanism

Page 7

Preview of page 7
Market efficiency

Page 8

Preview of page 8


No comments have yet been made

Similar Economics resources:

See all Economics resources »