Week 1: Supply and Demand and Elasticity

Introduction Supply and Demand Analysis Elasticity

Introduction

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This week's topic, demand and supply analysis, is presented first because it is one of the most powerful and useful models in the field of economics.

Demand and supply analysis gives us an excellent introduction to the methods of economic reasoning, or how to think about business and economic problems. The analytical methods we use in economics are great tools for enhancing problem-solving ability both in business and in personal finance.

In particular, this week focuses on what economists call the law of demand and the law of supply. Each of these laws examines the relationship of price (the independent variable) and quantity (the dependent variable). All other...