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Unformatted text preview: Microeconomics: Supply and Demand 05/09/2007 14:01:00 Review Session. Tuesday night 6:30 Demand and Quantity Demanded Demand: what consumers are willing and able to pay for goods and services Law of Demand: price and the quantity demanded are negatively related. Ceteris Paribus Quantity Demanded: the amount of the good or service that buyers are willing and able to purchase at each price Demand Schedule: a table showing the quantity demanded at each price for a product/good. Demand Curve: graph of a demand schedule o Negative slope o Downward sloping o Inverse relationship between price and quantity demanded. o Price goes of the Y-axis (P) o Quantity demanded goes on the X-axis (Q) o On a graph the demand is the entire curve. o The quantity demanded is one specific quantity at one specific price. o The change in quantity demanded results from a change in price. The Invisible Hand o Supply and Demand- automatic mechanism solution to economic problems through markets. (Adam Smith (1776) Alfred Marshall: the first to clearly explain how both costs and willingness to pay interact to determine market prices.pay interact to determine market prices....
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