Class Notes - 9-7-07

Class Notes - 9-7-07 - a. A horizontal sum of individuals...

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Microeconomics – Class Notes – 9/7/07 Demand homework won’t be due until Wednesday Read “Supply” for Monday (section from Chapter 3) CH. 3 – THE PRODUCT MARKET I. Demand (you as a consumer) a. A relationship between price and quantity demanded , ateuis panibus (all else constant) b. Price c. Quantity Demanded (Qd) – the quantity of a good that people want to buy at a specific price i. Law of Demand: As the Price increases, the quantity demanded decreases 1. Price and Quantity demanded have an inverse (negative relationship, negative slope) relationship ii. Demand Schedule: Price Quantity Demanded 12 8 9 11 6 14 Example: Aaron’s demand for movie tickets iii. Demand Curve
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iv. Equation form: P = a + b*Q 1. a=intercept 2. b=slope where (b<0) v. Market Demand: 1. Summation of Demand of all individuals in the market
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Unformatted text preview: a. A horizontal sum of individuals Demands 2. Example (Qd = Quantity Demanded) Price Qd (Aaron) Qd (Becca) Qd (Catie) Market (Qd) 12 8 4 5 17 9 11 5 6.5 22.5 6 14 6 8 28 3 Consumers in this market: Sum to find Market Demand Law holds as price decreases, quantity demanded increases vi. Movement along the Demand Curve 1. A change in PRICE II. Changes in Demand If any of the other factors (relating to consumers) change then the Price, Quantity Demanded relationship changes New Demand Curve Represented by a SHIFT in Demand a. Increase in Demand: Results in a higher Quantity Demanded at each price Price Quantity Demanded (0) Quantity Demanded (1) 12 8 16 6 14 22 b. A higher Quantity Demanded at each price i. SHIFT TO THE RIGHT...
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Class Notes - 9-7-07 - a. A horizontal sum of individuals...

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