Chapter 4

Chapter 4 - Expectations: if you expect price to fall tmr,...

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Chapter 4: A market is a group of buyers and sellers of a particular good or service. The buyers as a group determine the demand for the product, and the sellers as a group determine the supply of the product. Market demand= sum of all individual demand; downward slope: high price = low d Determinants of Demand: Income rises = more D for normal goods/ Less D for inferior goods Complements, Substitutes, Taste Number of buyers; d = sum of all individual demand
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Unformatted text preview: Expectations: if you expect price to fall tmr, you’ll buy less today Supply: higher price = higher S Market supply = sum of all Q supplied at a price Determinants of supply: Input prices, technology, expectations: if they expect to go up tmr, they produce less today, number of sellers Law of supply+demand: market self regulates back to equilibrium Price is the invisible hand...
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This note was uploaded on 04/02/2010 for the course AGEC 200 taught by Professor Anwarnaseem during the Winter '10 term at McGill.

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Chapter 4 - Expectations: if you expect price to fall tmr,...

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