View Single Post
10-23-2009   #27 (permalink)
WhatThePhuc
STEP
WhatThePhuc's Avatar
Awards Event WinnerMoM AwardSotW BeginnerWandering EyeFacebook FanTwitter Fan
 
Join Date: Jun 2008
Location: San Diego, California
Posts: 4,237
Blog Entries: 10
iTrader: (0)
WhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond reputeWhatThePhuc has a reputation beyond repute
Send a message via AIM to WhatThePhuc Send a message via MSN to WhatThePhuc
IGN: Phuc Tran
Class: Visual Arts Major lt_warlord
Level: 23
Guild: University of California, San Diego
Default

Quote:
Originally Posted by sentythee
Phuc's third set is actually incorrect. If the only reason for the increase in supply is the increase in price, then the new sellers will flee the market just as quickly as they entered when the price goes back down. This would cause the price to increase again, which means the new low price was never an equilibrium.
when the new sellers enter, the price goes back down to long run equilibrium
which is what the 3rd graph is showing
if what u suggest happens (supply decreases, causing price to increase again)
new sellers enter the market again, bringing the price to back to long-run equilibrium

if you'd like to see some links explaining this concept, just say so
__________________

Last edited by WhatThePhuc; 10-23-2009 at 05:51 PM.