outline_3 - 3. Determinant of Quantity Supplied a. Price of...

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Chapter 3 A. Buyers’ side of market: Demand 1. Definition 2. Demand Vs. Quantity Demanded a curve Vs. a point 3. Determinant of Quantity Demanded a. Price of good (-):The law of demand i. The substitution effect ii. The income effect: purchasing power 4. Determinants of Demand a. Income i. Normal good (+) ii. Inferior good (-) b. Price of related goods i. Substitutes: Increase price (+) ii. Complements: Increase price (-) c. Tastes and preferences (+) d. Number of buyers (+) e. Expectations: Future price (+) 5. Change in demand Vs. change in Quantity Demanded Shift of the demand curve Vs. movement along the demand curve B. Sellers’ side of market: Supply 1. Definition 2. Not to be confused with Quantity Supplied
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Unformatted text preview: 3. Determinant of Quantity Supplied a. Price of good (+): The law of supply 4. Determinants of Supply a. Price of inputs (i.e., wages) (-) b. Technological change (+) c. Price of substitutes (-) e. Number of sellers (+) d. Expectations: Future price (-) 5. Change in Supply Vs. Change in Quantity Supplied Shift of entire curve Vs. movement along curve C. Market Equilibrium and Disequilibrium 1. Equilibrium: quantity supplied=quantity demanded 2. Disequilibrium a. Excess supply: Surplus b. Excess demand: Shortage c. Return to equilibrium i. effect of shifts in supply ii. effect of shifts in demand...
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This note was uploaded on 02/24/2010 for the course ECON 2000 taught by Professor Roussell during the Spring '06 term at LSU.

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