September 8 - 10 1 8 3 A change in quantity demand What if...

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September 8, 2006 Demand Demand is – other things equal the various quantities taken aat alternative prices. What are the other factors held constant? Taste and preferences - T Income and wealth - Y o Income - flow o Wealth - stock Prices of related goods – Prel Number of consumers - N Range of good available - R Expectations – E Now: Q = f ( P , T , Y , Prel , N , R , E ) Demand is the box (highlighted part) – a functional relationship between price and quantitiy other things constant. What if price changes other things constant? Px Qx
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Unformatted text preview: 10 1 8 3 A change in quantity demand What if one of the non-price factors in the demand equation changes? How does the change in each non-price determinant affect demand? • T shifts towards a good D goes up • Y goes up D goes up • N goes up D goes up • R goes up D goes down • E goes up D goes up • Prel here the nature of the relationship becomes important Substitutes are goods that essentially compensate for another good. Compliments are goods which are consumed together (ex. Hotdogs and hotdog buns) Px...
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This note was uploaded on 05/01/2008 for the course ECON 101 taught by Professor Myers during the Spring '08 term at William & Mary.

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