Optional material for L09

1. Foodie on Equilibrium. It is a clear exposition of demand, supply, and equilibrium.
2. 1funkyteacher on demand and supply, and equilibrium. It uses auction for cows in an excellent illustrations of demand, supply, and equilibrium.
3. 1funkyteacher on changes in equilibrium. It discusses the market for natural gas and shows that price increases as supply decreases and demand increases. It also discusses why “rigging” the market may be difficult and how suppliers did so in the 2000s.
4. The Economic Detective’s video on supply and demand. This is a clear exposition of demand, supply, and equilibrium.
5. This story from from Planet Money illustrates what happens when prices do not adjust to shortages. It describes the backlog (backlog=shortage) of packages at UPS and FedEx during the Christmas season. “Surge” pricing could have eliminated the backlog; the backlog occurred because the quantity demanded exceeded the quantity supplied.
6. In this essay, Gary Becker and Julio Elias estimate that the shortage of kidneys would disappear if the price increased to something between $15K and $30K. About 4,000 people a year in the US die while waiting for a kidney transplant and another 1,200 are removed from the waiting list because they become too sick for a successful transplant. See also Becker,  Gary S. and Julio Jorge Elías (2007), “Introducing Incentives in the Market for Live and Cadaveric Organ Donations,” The Journal of Economic Perspectives, Vol. 21, No. 3 (Summer, 2007), pp. 3-24.