Lecture 6 1.11.08

Lecture 6 1.11.08 - Law of supply the higher the price of a...

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1.11.08 Ch 3 Quantitiy demand – the amount of a good or service that consumers plan to buy during a given time period at a particular prices Demand – the entire relationship between the price of a good and quantity demand (ceterins paribus) Law of demand – ceteri’s paribus, the lower the price of a good, the larger is the quantity demanded of it (ex Gucci/Versace/Ferrari) Charge in quantity demanded: a change in buyers’ plans that occurs when the P of a good changes (ceteris paribus) represented by a movement of the demand curve. Change in demand: a change in buyer’s plans that occur when some influence on those plans, other than the prices, charges. Ie preferences, income. The curve shifts Complement: Substitute: Normal: when demand increases as income increases Inferior: increase in $ demand shifts left Supply Quantity supplied: the amount of a good or service that produces plan to sell during a time period at a particular price Supply: the entire relationship between the price of a good and the quantity supplied of it
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Unformatted text preview: Law of supply the higher the price of a good, the greater the quantity supplied of it Change in quantity supplied: a change in sellers plans that occurs when the price of a good changes Change in supply: a change in sellers plans that occurs when some influence on these plan, other than the price of the good changes (ie producers change in cost of production graph shifts (supply curve) left /right Competetitive market a market that has many buyers sellers ; so no single buyer or seller can influence the price Equilibnrium price: the price at which the quantity odemand = quantity supplied Equilibrium supply Money price: the # of dollars that must be gien up in exchange fo a good or servces price tag Nominal price: the same as money Real price= the same meaning as relative; the ratio of the price of one good or serbie pto the price of another good or service-Relative price is the opportunity cost...
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Lecture 6 1.11.08 - Law of supply the higher the price of a...

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