Lec09 - 1 Demand Curve Demand Curve u demand curve for...

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Unformatted text preview: 1 Demand Curve Demand Curve u demand curve for individual u quantity demanded as a function of price u highest price willing to pay for each unit consumed Quantity Total Willingness to Pay Marginal Benefit- 1 9 9 2 14 5 3 17 3 4 19 2 5 20 1 Willingness to Pay 2 4 6 8 10 1 2 3 4 5 Quantity P r i c e ( P e r U n i t ) Demand Curve MU X /MU $ u MB < p consume less Individual Demand Individual Demand u consumer buys quantity for which MB = p Quantity < 2 Marginal Benefit > Price u MB > p consume more Quantity > 2 Marginal Benefit < Price 2 4 6 8 10 1 2 3 4 5 Quantity P r i c e ( P e r U n i t ) Market Price (=4) Market Demand Market Demand u Add (horizontally) quantity demanded at all prices for all consumers in the market 2 4 6 8 10 1 2 3 4 5 6 7 8 Quantity Market Demand 2 4 6 8 10 1 2 3 4 5 Quantity P r i c e ( P e r U n i t ) Fred’s Demand Barney’s Demand Price Market Demand 9 2 8 3 6 4 4 5 2 7 1 8 Price Barney’s Demand 9 2 6 3 Price Fred’s Demand 8 1 4 2 2 4 1 5 2 Benefit from...
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This note was uploaded on 10/10/2009 for the course ECON 101 taught by Professor Gerson during the Winter '08 term at University of Michigan.

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Lec09 - 1 Demand Curve Demand Curve u demand curve for...

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