Chapter 4 - Consumer Behavior

Chapter 4 - Consumer Behavior - Chapter 4 Consumer Behavior...

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Chapter 4 Consumer Behavior
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MB P $0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q
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Four Aspects of the Consumer Demand Function 1. Height 2. Width 3. Consumer Expenditure 4. Consumer Surplus MB is the consumer’s demand function for the product
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$0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q d Height: The most the consumer is willing and able to pay for different units of the product.
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$0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q d Width: Quantities the consumer is willing and able to buy at different prices.
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Definition of Consumer Demand Function A table, graph, or an equation that shows the quantities of a good that the consumer is willing and able to buy at different prices during a certain period of time. A table, graph, or an equation that shows the most the consumer is willing and able to pay for different units of a good during a certain period of time. We also know that it is:
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d P Consumer Expenditure $4 × 3 = $12 $0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q Consumer Expenditure
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$0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q Consumer Surplus d P
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$0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q Consumer Surplus Consumer Expenditure P d $4 × 3 = $12
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Consumer Surplus P d Change in Consumer Surplus $0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q
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$0 $1 $2 $3 $4 $5 $6 $7 $8 0 1 2 3 4 5 6 7 q Consumer Surplus P d Change in Expenditure
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This note was uploaded on 11/08/2010 for the course ECN ECN 001A taught by Professor Scottcarrell during the Spring '10 term at UC Davis.

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Chapter 4 - Consumer Behavior - Chapter 4 Consumer Behavior...

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