Week 2 Discussion - The interaction of supply and demand determines

Week 2 Discussion

• This week, we learned that the interaction of supply and demand determines prices and output levels in markets. Prices and output levels change when either the demand curve or the supply curve shifts. Sometimes price and output both increase and decrease. Sometimes one increases while the other decreases.
  • Be sure to respond to at least one of your classmates' posts. Was their reasoning similar to yours?
  • Start your discussion by responding to these questions:
    • What could explain the simultaneous increases in the price of lithium and the production of lithium??Use supply and demand curves to explain your answer.
    • Hint:?Price and equilibrium quantity have both increased. Would a shift in the demand curve or a shift in the supply curve lead to this result?
  • Lithium is used in rechargeable batteries for computers,?phones,?other electronic goods,?and even certain cars.?Demand for lithium was low as recently as the early?2000s.?Since then,?both the price of lithium and the production of lithium have more than doubled.