L1-DemandNSupply - Demand and Supply Chapter 4 1. Goals...

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Demand and Supply Chapter 4
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1. Goals z Understand z What the demand curve is. z What the supply curve is. z What the market equilibrium is. z Be able to analyze how any event influences a market, using the supply-and-demand diagram.
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Motivating Example z Oil Shock in 1970s z High Oil Price in 2000s
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2. DEMAND z Quantity demanded is the amount of a good that buyers are willing and able to purchase. z Law of Demand The law of demand states that, other things equal , the quantity demanded of a good falls when the price of the good rises.
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The Demand Curve: The Relationship between Price and Quantity Demanded z Demand Curve The demand curve is a graph of the relationship between the price of a good and the quantity demanded.
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Market Demand versus Individual Demand z Market demand refers to the sum of all individual demands for a particular good or service. z Graphically, individual demand curves are summed horizontally to obtain the market demand curve.
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(Inverse) Demand Function z Individual Demand Q Di = a i -b i × Price z Market Demand i Q Di = i a i - i b i × Price
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This note was uploaded on 05/15/2008 for the course ECON 2106 taught by Professor Minjaesong during the Spring '06 term at Georgia Institute of Technology.

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L1-DemandNSupply - Demand and Supply Chapter 4 1. Goals...

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