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Lecture 3 Notes

Lecture 3 Notes - Normal Good – Income up demand up...

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Lecture 3 Notes
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Demand and supply model Buyers Demand affected by Taste (what we think about a product) It is accepted that many people have very different tastes (business admin tries to change taste) Level of income Dollar votes Price Related goods (complementary goods) Bacon Price Down…. Egg demand up Substitute Goods Cereal Price Down… Eggs Demand Down Sellers Market place The Demand “Curve” It can move “shift” Buyers can move along it. “De gustibus non est disputandum.” You cant argue with taste
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Do you demand normal and inferior goods?
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Unformatted text preview: Normal Good – Income up demand up Inferior Good – Income up demand down Greater quantities demanded at lower prices. It’s not just a good idea. It’s the law The Supply curve It can move “shift” Sellers can move along It. Econ Lingo Distinction A change in demand v. A change in the quanity demanded Change in demand = whole demand curve shift Change in quantity demanded = price change responses A change in supply v. a change in the quantity supplied....
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