Several comparative statics exercises are provided to show how changes in exogenous variables will shift either supply or demand and cause an adjustment to a new equilibrium with a new market price and quantity. This module also discusses the derivation of a long-run supply curve that arises after free entry and exit of firms in response to profit is incorporated. We then briefly consider the effects that occur if technological information is not shared among firms. Finally we introduce two additional tools for supply analysis; supply elasticity and producer surplus. and provide some examples of how to numerically determine market welfare with given supply and demand functions.

Analyzing Changes in Supply and Demand - 19 minutes

Long-Run Market Adjustments in Perfect Competition - 29 minutes

Why Firms Keep Secrets - 16 minutes

Price Elasticity of Supply - 6 minutes

Producer Surplus Defined - 5 minutes