Econ101September12

# Econ101September12 - Econ 101 I II III IV V Increase Demand...

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Econ 101 September 12, 2007 I. Increase Demand a. Right shift of demand curve b. Original Equation: Q = 40 – P c. When Increasing Demand: Q = 50 – P d. Original supply curve: Q = 6 + P e. Solve for Q and P of new supply/Increased demand f. When demand increases i. Price increase ii. Quantity increase II. Decrease Demand a. Left shift of demand curve b. Equation goes from Q = 40 – P Q = 30 – P c. When demand decreases i. Price decreases ii. Quantity increases III. Increase Supply a. Rightward shift of curve b. Equation: Q = 6 + P Q = 11 + P c. Greater quantity supplied at every price d. When supply increases i. Price decreases ii. Quantity increases iii. Note: movement in opposite directions IV. Decrease in Supply a. Leftward shift of curve b. Equation: Q = 6 + P Q = -4 + 25 c. Smaller quantity at every price d. When supply decreases i. Price increases ii. Quantity decreases iii. Note: movement in opposite direction V. EXAMPLES: a. What happens when there would be an increase in family income change

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Unformatted text preview: the demand of air travel? i. Shift of demand curve to the right ii. Market price would go up because quantity would go up b. Increase in price of software? What happens to demand of computers? Market price and quantity? i. Demand of computers would decrease. ii. Market price decreases, quantity decreases iii. Shift down of demand curve iv. When price of complimentary good rises (software), the price of original good decreases (computer) c. How would increased price of Cornell Hockey tickets change demand for women’s basketball tickets? i. Increase in \$ Hockey would make demand for basketball tickets go up ii. Higher price and quantity or basketball tickets iii. Hockey is “substitute” for basketball, when substitute (hockey) price increases, the demand for the original good (basketball) increases as well d....
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