Chapter 3 - Supply and Demand Buyers side Demand a function showing the various quantities that consumers would be willing and financially able to

Chapter 3 - Supply and Demand Buyers side Demand a function...

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Supply and Demand Buyers side: Demand - a functon showing The various quanttes ThaT consumers would be willing and Fnancially able To purchase aT di±erenT prices, oTher Things remaining consTanT. Ceteris Paribus Conditon- oTher Things remaining consTanT. Law of Demand - The quantTy demanded of a producT varies inversely wiTh iTs price Ceteris Paribus. ( Downward sloping, linear, or not linear, convex) DOWNWARD FROM LEFT TO RIGHT A MarkeT demand curve can be derived from individual consumer demand curves Through The process of horizonTal summaton. MovemenT along a single or sTatonary demand curve can be caused only by a change in ThaT good’s price. Such a movemenT is generally called a change in quantTy demanded. Change in demand- a shi² of The entre demand curve caused by a change in someThing oTher Than ThaT good’s price. An increase in demand is a righTward shi² of The demand curve. Common Shi²ers for demand: 1. Change in consumers’ incomes normal goods and inferior goods 2. Change in preferences 3.
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