9.15.10 - 9.15.2010 Demand, Supply, and Market Equilibrium...

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9.15.2010 Demand, Supply, and Market Equilibrium Markets Bring together buyers and sellers Exist in many forms Demand – Schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time Demand schedule => demand shown in table form Law of demand – inverse relationship between price and quantity demanded Consistent with common sense Diminishing marginal utility – in any specific time period, each buyer of a product will derive less satisfaction from each successive unit of the product they consumed Income effect – indicates that a lower price increases the purchasing power of a buyer’s money income Enables the buyer to purchase more of the product than before Substitution effect – suggests that at a lower price buyers have the incentive to substitute what is now a less expensive product for similar products that are now relatively more expensive Demand curve => price-quantity data points graphed to show the trends and
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This note was uploaded on 11/21/2010 for the course ECON 101 taught by Professor M.h.baligh during the Fall '09 term at Bergen Community College.

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9.15.10 - 9.15.2010 Demand, Supply, and Market Equilibrium...

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