- •Business issues Проблемы бизнеса
- •Contents
- •Введение
- •Part I. Bisiness chapter I. Management key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text management
- •Grammar practice
- •Language practice
- •IX. Translate the following sentences into English
- •X. Answer the questions about the text
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «управлять, руководить»
- •XII. Read the text and divide it into some meaningful parts, giving the proper title to each of them general concept on management
- •XIII. Write a summary of the text
- •XV. Work in groups of two or three, talk about management
- •Chapter 2. Marketing key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text marketing
- •Grammar practice
- •V. Find in the text four sentences of at least two different tenses in the Active Voice, copy them into your exercise books, give simple grammar analysis of these sentences
- •Language practice
- •VI. Look through the text to find the English equivalents of the following terms and give the sentences with them
- •VII. Find in the text the sentences that correspond to the following statements
- •VIII. Translate the following sentences into English
- •IX. Answer the questions about the text
- •X. Find in the dictionary the definitions of the synonyms with the meaning of «прибыль, доход»
- •XI. Read the text and divide it into some meaningful parts, giving the proper title to each of them
- •XII. Write a summary of the text
- •Speaking
- •XIII. Practice talking about the following situations
- •XIV. Work in pairs of two or three and talk about marketing
- •Chapter 3. Types of enterprises section 3.1. Concept of small business key vocabulary
- •Small business
- •Grammar practice
- •V. Find in the text four sentences of at least two different tenses in the Passive Voice, copy them into your exercise books, give simple grammar analysis of these sentences. Language practice
- •VI. Look through the text to find the English equivalents of the following terms and give the sentences with them
- •VII. Find in the text the sentences that correspond to the following statements
- •VIII. Translate the following sentences into English
- •IX. Answer the questions to the text
- •X. Find in the dictionary the definition of the synonyms with the meaning of:
- •XI. Read the text and divide it into some meaningful parts giving the proper title to each of them which is better – to buy an existing firm or start
- •X II. Write a summary of the text
- •Speaking
- •XIII. Practice talking about the following situations
- •Section 3.2. Different types of business: sole proprietorship and partnership key vocabulary
- •Read and remember the pronunciation the following words
- •II. Read and translate the following groups of words
- •III. Remember the words given
- •IV. Define the part of speech of the following words
- •V. Make nouns of these verbs
- •VI. Listen, read and translate the text sole proprietor
- •Grammar practice
- •VII. Find in the text two sentences in the Passive Voice, copy them into your exercise books, give simple grammar analysis of these sentences.
- •VIII. Find in the text sentences with the Infinitive and define its form and function. See Grammar in Use section if necessary. Language practice
- •IX. Fill in the blanks using the words given below:
- •X. Match the synonyms
- •XI. Match the antonyms
- •XII. Make up antonyms of the words given using proper prefixes
- •XIV. Make up sentences using the following words
- •XVI. Put questions to the words in italics
- •XVII. Put the verbs in brackets into the correct form
- •XVIII. Answer the following questions
- •XIX. Read and translate the text and define the advantages and drawbacks of the business organization in question partnership
- •Speaking
- •Section 3.3. Joint stock company key vocabulary
- •III. Listen, read and translate the text joint stock company
- •Grammar practice
- •Language practice
- •Speaking
- •Section 3.4. Joint venture key vocabulary
- •III. Read the following verbs and verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text joint venture
- •Introduction
- •Market study
- •Initial representation
- •Further discussions
- •Choice of partners
- •Local management
- •Partnership
- •Financial considerations
- •Legal and other fees
- •Grammar practice
- •V. Find in the text sentences in the Active Voice, copy them into your exercise books, give simple grammar analysis of these sentences.
- •VI. Find in the text sentences with the Infinitives and define their forms and functions. See Grammar in Use section if necessary. Language practice
- •VII. Look through the text to find the English equivalents of the following Russian terms and give the sentences with them
- •VIII. Find in the text the sentences that correspond to the following statements
- •IX. Translate the following sentences into English
- •X. Answer the questions about the text
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «заем»
- •XII. Read the text and divide it into some meaningful parts, giving the proper title to each of them transfer of technology
- •XIII. Write a summary of the text
- •XIV. Reproduce the main text using the words given in Exercises I, II, III.
- •XV. Practice talking about the following situations
- •XVI. Work in groups of two or three, talk about joint venture activity
- •Section 3.5. Business planning key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your own sentences with them
- •III. Remember the following word combinations
- •IV. Listen, read and translate the text business planning
- •Grammar practice
- •Language practice
- •X. Translate the following sentences into English
- •XI. Answer the questions about the text
- •XII. Find in the dictionary the definitions of the synonyms with the meaning of «расход, издержки»
- •XIII. Read the text and divide it into some meaningful parts, giving the proper title to each of them the stages of a business
- •XIV. Write a summary of the text according to the following plan
- •Speaking
- •XV. Reproduce the main text using the words given in exercises I, II, III.
- •XVI. Practice talking about
- •Chapter 4. Banks and money section 4.1. Money key vocabulary
- •I. Remember the correct pronunciation of these words
- •II. Read and translate the following groups of words
- •III. Remember the words and word combinations given
- •IV. Define the part of speech
- •V. Make nouns of the following verbs
- •VI. Listen, read and translate the text money and its functions
- •The functions of money
- •Grammar practice
- •Language practice
- •XVII. Fill in the gaps with proper prepositions
- •XVIII. Make questions to the words in italics
- •XIX. Fill in the gaps using the verbs given in brackets
- •Speaking
- •XX. Answer the following questions. Give the examples to describe your opinion
- •XXI. Work in pairs. Discuss the importance of this or that form of money.
- •XXII. Work in small groups
- •Regulation and token money
- •Section 4.2. Banking and financing key vocabulary
- •III. Read the following verbal phrases and pay attention to the prepositions used after them
- •IV. Listen, read and translate the text the commercial banks
- •Grammar practice
- •Language practice
- •IX. Translate the following sentences into English
- •Speaking
- •Financing of international trade
- •The foreign exchange market
- •XIV. Write a summary of the text
- •XV. Practice talking about the following situations
- •XVI. Work in groups of two or three, talk about banking and payment
- •Section 4.3. Inflation key vocabulary
- •I. Read the words below and remember the correct pronunciation of them
- •II. Read and translate the following groups of words
- •III. Remember the words and word combinations given
- •IV. Define the part of speech of the following words
- •V. Make nouns of the following verbs
- •VI. Listen, read and translate the text types of inflation
- •Grammar practice
- •Language practice
- •XVIII. Put prepositions into the blanks
- •XIX. Put question to the words in italics
- •XX. Fill in the blanks using the necessary forms of the verbs given in brackets
- •Speaking
- •XXI. Work in pairs. Student a asks questions, student b answers them
- •XXIII. Read and translate the text the effects of inflation
- •Chapter 5. Fairs and exhibitions key vocabulary
- •Fairs and exhibitions
- •Grammar practice
- •Language practice
- •X. Translate the following sentences into English
- •XI. Answer the questions about the text
- •XII. Find in the dictionary the definitions of the following synonyms with the meaning of «показ; демонстрация»
- •XIII. Read the text and divide it into some meaningful parts giving the proper title to each of them rules and regulations
- •XIV. Write a summary of the text with to the following phrases
- •Speaking
- •XV. Reproduce the main text, using the words given in exercises I, II, III.
- •XVI. Practice talking about the folloving situations
- •XVII. Work in groups of two or three, talk about your firm's participation in the exhibition, using the information about conditions of participation
- •Chapter 6. Business contacts key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English word combinations and their Russian equivalents. Give your own sentences with them
- •III. Read the following verbal phrases and lexical combinations and pay attention to the prepositions used after them
- •Listen, read and translate the text business contacts
- •Grammar practice
- •Language practice
- •XI. Translate the following sentences into English
- •XII. Answer the questions about the text
- •XIII. Find in the dictionary the definitions of the synonyms with the meaning of «договоренность»
- •XIV. Read the text, divide it into some meaningful parts giving the proper title to each of them kioge-97 – the 5th kazakhstan international oil and gas exhibitions
- •XV. Write a summary of the text with the following phrases
- •Speaking
- •XVI. Reproduce the main text, using the words given in exercises I, II, III.
- •XVII. Work in groups of two or three, talk about business matters
- •XVIII. Practice talking about:
- •Chapter 7. Contracts and agreements key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English terms and their Russian equivalents. Give your sentences with them
- •III. Read the following verbs and pay attention to the prepositions used after them
- •Listen, read and translate the text
- •Languge practice
- •V. Look through the text to find English equivalents of the following terms and give your sentences with them
- •VI. Find in the text the sentences that correspond to the following statements
- •VII. Translate the following sentences into English
- •VIII. Answer these questions about the text
- •IX. Find in the dictionary the definitions of the synonyms with the meaning of
- •X. Read the text and divide it into some meaningful parts, giving the proper title to each of them
- •Articles
- •XI. Write a summary of the text
- •Speaking
- •XII. Reproduce the main text, using the words given in exercises I, II, III.
- •XIII. Work in groups of two or three, talk about contracts and agreements
- •XIV. Practise talking about:
- •Chapter 8. Business letters key vocabulaty
- •I. Remember the correct pronunciation of these words
- •II. Learn the following English words and phrases and their Russian equivalents. Give your sentences with them
- •III. Listen, read and translate the text business letter
- •Language practice
- •VIII. Translate the following sentences into English
- •IX. Answer the questions about the text
- •X. Study the contents of business letters
- •XI. Find in the dictionary the definitions of the synonyms with the meaning of «удобство»
- •XII. Read the text, divide it into some meaningful parts giving the proper title to each of them
- •X III. Write a summary of the text
- •XIV. Read and learn the registration form, the application for accommodation, the layout of the letter, the order form for catalogue and some samples of letters Registration Form
- •Accommodation
- •The layout of the letter
- •The Samples of Letter
- •2. Text of entry 2. Текст
- •XVI. Write the letters using the samples given in exercise хv
- •XVII. Reproduce the main text
- •I. Read and remember the words given
- •Individual and society
- •Grammar practice
- •Language practice
- •XII. Fill in the blanks with prepositions
- •XIII. Fill in the gaps with the verbs given in brackets
- •XIV. Response on the following
- •XV. Make up questions to the following sentences
- •XVI. Translate from Russian into English
- •Speaking
- •Section 1.2. Scarcity and choice key vocabulaty
- •Read and translate the groups of words given
- •III. Listen, read and translate the text scarcity and choice
- •Grammar practice
- •Language practice
- •X. Fill in the gaps
- •XI. Join the sentence halves below
- •XII. Answer the question below
- •XIII. Translate from Russian into English
- •The role of the market
- •Grammar practice
- •Language practice
- •XVI. Fill in the blanks with the correct forms of the verbs given in brackets
- •XVII. Answer the questions
- •XVIII. Translate from Russian into English
- •Speaking
- •XIX. Work in pairs or small groups. Think of the example of any seller and prove that it is profitable for him to be in the business.
- •XX. Making a report. Make a report on the role of the market. Use simple language
- •Section 2.2. The command economy, the free market economy and the mixed economy key vocabulaty
- •I. Read and remember the following words
- •II. Translate and remember the following word combinations
- •III. Find the English equivalents to the following word expressions
- •IV. Listen, read and translate the text the command economy, the free market economy, the mixed economy
- •Grammar practice
- •Language practice
- •IX. Answer the questions
- •X. Translate from Russian into English
- •Speaking
- •Chapter 3. Macroeconomics and microeconomics section 3.1. What is macroeconomics? key vocabulaty
- •Find Russian equivalents to the following English word combinations
- •III. Find the English equivalents to the following word expressions
- •IV. Listen, read and translate the text what is macroeconomics?
- •Grammar practice
- •Language practice
- •Speaking
- •Section 3.2. What is microeconomics? key vocabulary
- •II. Find the equivalents to the following word combinations
- •III. Give the English for the following
- •IV. Listen, read and translate the text microeconomics
- •Grammar practice
- •Language practice
- •XII. Match the terms and their definitions
- •XIII. Answer the following questions for general understanding
- •XIV. Translate into Russian
- •XV. Translate from Russian into English
- •XVI. Writing a summary is a useful activity to prepare for any oral task such as retelling or discussion.
- •XVII. Imagine, you are a participant at a scientific conference on economics. You have to make a 3 minutes report on the topic «Macro – and Microeconomics»
- •I. Read and remember the following words
- •II. Find equivalents in Russian
- •III. Give English for the following
- •IV. Listen, read and translate the text the market
- •Grammar practice
- •Language practice
- •XI. Translate into Russian
- •XII. Translate from Russian into English
- •XIII. Write a summary to the text «Market»
- •Speaking
- •XIV. Work in small groups. Think of the model of any market, say fast food, fashion goods or pharmaceutical goods, study the features of that market and see how it works in practice
- •Section 4.2. Demand, supply, and equilibrium key vocabulary
- •I. Read and remember the following words
- •Demand, supply, and equilibrium
- •The demand for and the supply of chocolate
- •Grammar practice
- •Language practice
- •XI. Make up questions to the following sentences
- •XII. Answer the following questions for general understanding
- •XIII. Read each statement given and decide which of the following is not true
- •XIV. Translate from Russian into English
- •XV. Look through the text once again and write a summary of this text
- •Speaking
- •X VI. Work in small groups. Think about examples of storable commodities, decide whether it is necessary in some economies to stock them and present your ideas to the class
- •XVII. Work in pairs. Read the information given below and think of and discuss the examples of the Giffen and the Veblen effects
- •X VIII. Make a brief report on the subject: «Demand and supply, and the Market»
- •Chapter 5. Competition section 5.1. The limiting cases of market structure key vocabulary
- •I. Read and remember the following words
- •II. Match each expression with its meaning
- •III. Read and translate the groups of words
- •IV. Translate the word combinations from Russian into English
- •V. Listen, read and translate the text the limiting cases of market structure
- •Grammar practice
- •Language practice
- •X. Read each statement below and decide which of the following is not true
- •XI. Make up questions to the following sentences
- •XII. Answer the following questions
- •XIII. Translate from Russian into English
- •Speaking
- •Section 5.2. Perfect competition key vocabulary
- •Perfect competition
- •Grammar practice
- •Language practice
- •XII. Join the halves of the sentences below
- •XIII. Make up questions to the following sentences
- •XIV. Answer the following questions
- •XV. Translate from Russian into English
- •Speaking
- •XVI. Talk to your partner and give one or two examples of a perfectly competitive market where neither buyers nor sellers believe that their own actions affect the market price.
- •XVII. Firstly work as a class and read the information below. Then think of examples of some firms and prove they are really perfectly competitive ones
- •Section 5.3. Competition in world markets key vocabulary
- •Read and remember the following words
- •II. Translate the following word combinations from Russian into English
- •III. Translate the word combinations from English into Russian
- •IV. Listen, read and translate the text competition in the world market
- •Grammar practice
- •Language practice
- •X. Fill in the gaps with the verbs given in brackets
- •XI. Answer the following questions
- •XII. Translate from Russian into English
- •Speaking
- •X IV. Prepare a 2 minutes report on the topic «Competition on the World Market»
- •Section 5.4. Oligopoly key vocabulary
- •I. Read and remember the following words
- •II Guess the meaning of the following word combinations from the text
- •III. Give English for the following
- •IV. Listen, read and translate the text oligopoly
- •Grammar practice
- •Language practice
- •Exercises
- •I. Open the brackets using the verbs in one of the following tenses: the Present Continuous, Present Simple, Past Simple or Future Simple
- •II. Open the brackets using the verbs in one of the following tenses: the Present Continuous, Present Simple, Past Indefinite or Future Simple
- •III. Open the brackets using the verbs in one of the following tenses: the Present Continuous or Past Continuous
- •IV. Open the brackets using the verbs in one of the following tenses: the Past Simple or Past Continuous
- •V. Open the brackets using the verbs in one of the following tenses: the Present, Past, Future Simple, Present, Past Continuous
- •VI. Open the brackets using the verbs in the following tenses: the Past Simple or Present Perfect
- •VII. Open the brackets using the verbs in the following tenses: the Past Simple or Present Perfect
- •VIII. Open the brackets using the verbs in the following tenses: the Past Simple or Past Perfect
- •IX. Open the brackets using the verbs in one of the following tenses: the Past Simple, Past Continuous or Past Perfect
- •X. Open the brackets using the verbs in one of the following tenses: the Present Perfect, Past Simple, Past Continuous or Past Perfect
- •XI. Put the verbs in brackets into the Present, Past or Future Perfect Continuous Tense
- •XII. Form the questions with the question word given
- •XIII. Translate into English
- •Section 1.2. The passive voice
- •Exercises
- •I. Answer the following questions
- •II. Transform the sentences from Active into Passive
- •III. Fill in each blank with the necessary form of the verb in the Passive Voice
- •IV. Put questions to the words given in bold type
- •V. Translate the following sentences into Russian
- •VI. Translate into English
- •VII. Put the verbs in brackets into the correct tense-form
- •VIII. Transfer the verbs in brackets into the correct tense form
- •IX. Translate from Russian into English
- •X. Translate into Russian
- •XI. Change these Active constructions into the Passive ones
- •Chapter 2. Non-finite forms of the verb section 2.1. The infinitive forms of the infinitive
- •Functions of the infinitive
- •Infinitive constructions Complex Object
- •Complex Subject
- •Exercises
- •I. Translate from English into Russian
- •II. Translate from Russian into English using Complex Object where necessary
- •III. Translate from Russian into English using Complex Object
- •IV. Translate from English into Russian and underline Complex Object
- •V. Transfer complex sentences into simple ones using Complex Subject and translate them
- •VI. Translate into Russian
- •VII. Translate sentences using Complex Subject
- •VIII. Translate from Russian into English using the «for» construction
- •Section 2.2. The participle forms of the participle
- •Functions of the participle
- •Participle constructions
- •Exercises
- •I. Translate into Russian, define the form and the function of the Participle
- •II. Translate into Russian, change Participle Construction into subordinate clauses
- •III. Change subordinate clauses into Participle Constructions and translate them into Russian
- •IV. Translate into English
- •V. Translate into English using the Objective Participial Construction
- •VI. Translate into Russian paying attention to the Absolute Participle Construction
- •VII. Translate into Russian, define the form and the function of the Participle
- •VIII. Translate into English
- •IX. Translate into Russian keeping the rule of translation of the Absolute Participle Construction
- •Complex gerund construction
- •I. Transfer the verb in brackets into the form of Gerund using the corresponding preposition
- •II. Change the subordinate clauses with the Gerund using the corresponding preposition where necessary
- •III. Translate into English using the Gerund
- •IV. Transfer subordinate clauses into the complex Gerund Constructions using the corresponding preposition
- •V. Translate into English with the help of the corresponding preposition
- •Tests tests to part I test I (chapters 1 – 3)
- •1. Упорядочение
- •2. Соответствие
- •3. Поле ввода
- •4. Заполнить пропуски. Завершите следующие фразы подходящим высказыванием:
- •5. Несколько полей ввода (вопрос – ответ)
- •Test II (chapters 4 – 8)
- •1. Упорядочение (распределение синонимов по группам)
- •2. Соответствие
- •3. Поле ввода
- •4. Заполнить пропуски. Завершите следующие фразы подходящим высказыванием:
- •5. Несколько полей ввода (вопрос – ответ)
- •Tests to part II test I (chapters 1 – 3)
- •1. Упорядочение по группам (объедините в группы слова близкие по значению по разделам a, b, c, d, e)
- •2. Соответствие в парах: соотнести английский вариант с русским
- •3. Поле ввода
- •4. Дайте развернутый ответ по ситуации
- •Test II (chapters 4 – 5)
- •1. Упорядочение: расположить по группам (объедините в группы слова близкие по значению: a, b, c, d, e)
- •2. Соответствие в парах: соотнести английский вариант с русским
- •3. Поле ввода
- •4. Найдите область на рисунке
- •5. Дайте развернутый ответ по ситуации
- •Answer keys to tests
- •Библиографический список
Section 4.2. Demand, supply, and equilibrium key vocabulary
I. Read and remember the following words
conceivable [ken'sɪ:vәbl] – постижимый, мыслимый, возможный, вероятный
instant ['ɪnstәnt] – мгновение, момент
bar [ba:] – плитка
assume [ә'zjum] – предполагать, допускать
incentive ['ɪnsәntɪv] – стимул, побуждение
lucrative ['lu:krәtɪv] – прибыльный
distinction [dɪs'tɪnkʃn] – различие, отличие
adjust [ә'ʤʌst] – приспосабливаться
decay [dɪ'keɪ] – разрушение
relevant to ['relɪvәnt tu] – уместный, относящийся к делу
be frustrated [bɪ: frʌstreɪtɪd] – быть расстроенным
shortage ['ʃɔ:tɪʤ] – нехватка, недостаток, дефицит
II. Read and translate the groups of words given
range of prices, finite amount, get sick, other things equal, function of its price, complete description, to produce for nothing, schedule relating price and quantity, equilibrium price.
III. Translate these word combinations from Russian into English
соответствующее увеличение, количество спроса, а именно, средняя цена, удобное сокращение, плитка шоколада, вероятная цена, заболеть, полное описание, все более прибыльный.
IV. Translate these word expressions and in simple words explain their meanings
conspicuous consumption, a negative income effect, substitution effect, to want solely for something, inferior goods, storable commodities, durable goods, substitute products, complementary goods, opportunity costs, elasticity of supply bountiful crops.
V. Listen, read and translate the text
Demand, supply, and equilibrium
Demand is the quantity of a good buyers wish to purchase at each conceivable price. Thus demand is not a particular quantity, such as six bars of chocolate, but rather a full description of the quantity of chocolate the buyer would purchase at each and every price which might be charged. The first column of the Table shows a range of prices for bars of chocolate. The second column shows the quantities that might be demanded at these prices. Even when chocolate is free, only a finite amount will be wanted. People get sick from eating too much chocolate. As the price of chocolate rises, the quantity demanded falls, other things equal. We have assumed that nobody will buy any chocolate when the price is more than Ј0.40 per bar. Taken together, columns (1) and (2) describe the demand for chocolate as a function of its price.
The demand for and the supply of chocolate
1. Price, Ј / bar |
2. Demand, million bars / year |
3. Supply, million bars / year |
0.00 |
200 |
0 |
0.10 |
160 |
0 |
0.20 |
120 |
40 |
0.30 |
80 |
80 |
0.40 |
40 |
120 |
0.50 |
0 |
160 |
Supply is the quantity of a good sellers wish to sell at each conceivable price. Again, supply is not a particular quantity but a complete description of the quantity that sellers would like to sell at each and every possible price. The third column of the Table shows how much chocolate sellers wish to sell at each price. Chocolate cannot be produced for nothing. Nobody would wish to supply if they receive a zero price. In our example, it takes a price of at least Ј0.20 per bar before there is any incentive to supply chocolate. At higher prices it become increasingly lucrative to supply chocolate bars and there is a corresponding increase in the quantity of bars that would be supplied. Taken together, columns (1) and (3) describe the supply of chocolate bars as a function of their price.
Notice the distinction between demand and the quantity demanded. Demand describes the behaviour of buyers at every price. At a particular price such as Ј0.30, there is a particular quantity demanded, namely 80 million bars/year. The term 'quantity demanded' makes sense only in relation to a particular price. A similar distinction applies to supply and quantity supplied.
We must recognize that the demand schedule relating price and quantity demanded and the supply schedule relating price and quantity supplied are each constructed on the assumption of 'other things equal'. To understand how a market works, we must first explain why demand and supply are what they are. Then we must examine how the price adjusts to balance the quantities supplied and demanded, given the underlying supply and demand schedules relating quantity to price. Let us think again about the market for chocolate described in the Table. Other things equal, the lower the price of chocolate, the higher the quantity demanded. Other things equal, the higher the price of chocolate, the higher the quantity supplied. A campaign by dentists warning of the effect of chocolate on tooth decay, or a fall in household incomes, would change the 'other things' relevant to the demand for chocolate. Either of these changes would reduce the demand for chocolate, reducing the quantities demanded at each price. Cheaper cocoa beans, or technical advances in packaging chocolate bars, would change the 'other things' relevant to the supply of chocolate bars. They would tend to increase the supply of chocolate bars, increasing the quantity supplied at each possible price.
For the moment, we assume that all these other things remain constant. We wish to combine the behaviour of buyers and sellers described in the Table to model how the market for chocolate bars would actually work. At low prices, the quantity demanded exceeds the quantity supplied but the reverse is true at high prices. At some intermediate price, which we call the «equilibrium price», the quantity demanded just equals the quantity supplied. The equilibrium price clears the market for chocolate. It is the price at which the quantity supplied equals the quantity demanded.
The Table shows that the equilibrium price for chocolate bars is Ј0.30:80 million bars per year is the quantity buyers wish to buy and sellers wish to sell at this price. We call 80 million bars per year the equilibrium quantity. At prices below Ј0.30, the quantity demanded exceeds the quantity supplied and some buyers will be frustrated. There is a shortage, what we call excess demand. You will realize that when economists say there is excess demand they are using a convenient shorthand for the more complicated expression: the quantity demanded exceeds the quantity supplied at this price.
At any particular instant, the market price may not be the equilibrium price. If not, there will be either excess supply or excess demand, depending on whether the price lies above or below the equilibrium price. But these forces themselves provide the incentive to change prices towards the equilibrium price. In this sense, markets are self-correcting.