d1d948a98558e84f9e27b0768c2c0a9f_17_11_2019_12_52 - Demand Movement Along Demand Curve Demand Curve shifts D Q Q QI Caused By A Change in Price Caused

d1d948a98558e84f9e27b0768c2c0a9f_17_11_2019_12_52 - Demand...

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Unformatted text preview: Demand Movement Along Demand Curve Demand Curve shifts D Q Q QI Caused By: A Change in Price Caused By: A Change in Demand Demand for Good X [D.] depends on: Dx = f (Px, Pc, P., y, t, E) 1. The Price of Good X (Px) 2. The Price of Complementary Goods (Pe] 3. The Price of Substitute Goods (Pal 4, Income (y) 5. Taste (1] 6. Future Expectations (E] Basic Law of Demand: [Price P | Quantity Demanded Q and IP QD There are some exceptions to this... P. Gillen Goods (GG;) Snob *Status Symbol' Expectation/Speculalive Necessity goods Le. breed, Gooch Goods milk. If the price of GGs goes show of wealth/success in Te. property up, more income is spent on goods means you will spend Buy now as you might expect GGs than luxuries, raising the more to be part of an price next year to be exclusive trend unaffordable Pc Complementary Goods: Two goods which require the use of another ie. tea and milk, bread and butter, printers and ink cartridges Substitute Goods: Goods with similar characteristics and used in Identical ways l.e. Aldi cornflakes V. Kellogg's, different brands of bread, milk, butter, chocolate etc 2 different types of income... It is possible to get a a) Money Income - nominal earnings expressed as wages/salary nae in money income b) Real Income - purchasing power of earnings (what you can buy) and suffer a decline in Y real income as cost of NORMAL GOOD INFERIOR GOOD living fgroceries, Good with positive income effect Good with negative income effect transport costs etc) More Y = More Go More Y = Less Qo might exceed rise in Less Y = Less Qo Less Y = More Qo actual money T For all goods if consumer tastes react positively toward them_more will be demanded. If tastes change negotively toward a good..less will be demanded E Expectations change depending on (1) Future Price (2) Future availability (3) Future Income...
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