Updated Chpt 4 Chpt 5 Demand and supply.pdf - • Chapter 4: Demand supply and prices © VAN SCHAIK PUBLISHERS Chapter Outcomes Once you have studied

Chapter Outcomes© VAN SCHAIK PUBLISHERSOnce you have studied this chapter you should be able to•identify the most important determinants of the quantity demanded•show how demand can be expressed in words, numbers, graphs andequations•explain the difference between demand and quantity demanded•differentiate between a movement along a demand curve and a shiftof a demand curve•explain the determinants of the quantity supplied•distinguish between a movement along a supply curve and a shift ofa supply curve•explain how the equilibrium price and quantity are determineddistinguish between the consumer surplus and the producer surplus

Demand and supply:An introductory overview© VAN SCHAIK PUBLISHERS123–Firmsdetermine supply4–HH determinedemandHouseholds sell their factors of production to firms. Firms use these factors to produce goods andservices that are sold in the goods markets to households who use their income to buy the goods andservices..

DemandDemand–decision about which wants to satisfy from theavailable meansRefers to the quantity of goods & service buyers are willingto purchase during a time periodTypes of demand•Individual demand•Market demandDemand can be expressed by:•Using words•Using numbers•Using graphs•Using symbols© VAN SCHAIK PUBLISHERS

Demand© VAN SCHAIK PUBLISHERSIndividual demand–Determinants•The price of the product•The price of related products•The income of the consumer•The taste or preference of the consumer

Demand© VAN SCHAIK PUBLISHERSIndividual demandAnne’s demandschedules for tomatoesAnne’s weekly demand for tomatoes

•Market demand–sum of all individual demandsDeriving the market demand schedule from individual demand schedules© VAN SCHAIK PUBLISHERSDemand

The market demand curve© VAN SCHAIK PUBLISHERSMarket demandDemand

The market demand curve for tomatoes© VAN SCHAIK PUBLISHERSMarket demandDemand

•Movements along the demand curve and shifts of thecurve•A movement along a demand curve (a change in thequantity demanded)A movement along ademand curve© VAN SCHAIK PUBLISHERSDemand

•A shift of the demand curve (a change in demand)© VAN SCHAIK PUBLISHERS–A change in the price of a related good–SubstitutesTwo substitutes: butter and margarineDemand

–ComplementsTwo complements: CD players and CDs© VAN SCHAIK PUBLISHERSDemandA shift of the demand curve (a change in demand)

–A change in the income of consumer© VAN SCHAIK PUBLISHERS–A change in consumers’tastes or preferences–A change in population–Other influences on demand*A change in expected future pricesSee Box 4-1 The importance of relative prices(Textbook page 69)*The distribution of incomeDemandA shift of the demand curve (a change in demand)

•Demand: a summarySee Table 4-3 The market demand curve: a summary© VAN SCHAIK PUBLISHERSDemand

•Demand: a summaryA change in the quantitydemanded versus achange in demand© VAN SCHAIK PUBLISHERS

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 46 pages?

Upload your study docs or become a

Course Hero member to access this document

Term

Summer

Professor

NoProfessor

Updated Chpt 4 Chpt 5 Demand and supply.pdf - • Chapter...

Share this link with a friend:

Other Related Materials

Newly uploaded documents

Newly uploaded documents