B200.F09.W04.Elasticity.Clsnts

B200.F09.W04.Elasticity.Clsnts - BUAD 200 Fall 2009 Week 04...

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BUAD 200 Fall 2009 Week 04 Classnotes September 14 - 16, 2009 (Chapter 5) Market Demand determines Price : As you look at all the goods available to be purchased, the food, the clothing, the cars, etc. the price you have to pay is determined by all the other buyers, and what they are willing to pay. (Ex. Auction) 1. The equilibrium price and quantity will change as there are changes in demand or supply. ( shifts of the curves due to changes in some other factor.) 2. When prices change in the economy it is due to a shift in either demand and/or supply. 3. Analyze the change in equilibrium price and quantity of: a. increase or decrease in demand. b. increase or decrease in supply. 4. Defined Total Revenue = Price times Quantity (TR = P x Q) 5. The amount of relative price change or quantity change is a function of how responsive buyers or sellers are to price changes. i.e. Elasticity. 6. The price elasticity of demand is a measure of the responsiveness of the quantity demanded by buyers to a change in price. The price elasticity of supply
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B200.F09.W04.Elasticity.Clsnts - BUAD 200 Fall 2009 Week 04...

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