03 Demand and Supply- A Closer Look

03 Demand and Supply- A Closer Look - Demand and Supply: A...

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Demand and Supply: A Closer Look 2/17/11 11:57 PM September 9, 2010: Demand Curve Shifters o The demand curve shows how price affects quantity demanded, other things equal. o These “other things” are things, other than price, that affect demand o Changes in these “other things” cause the entire D curve to shift o Number of buyers an increase in the number of buyers increases quantity demanded at each price, and shifts the D curve to the right; and vice versa Slide 4 At every price level, there will be increased demand Might not always be parallel shift, but everything will shift o Income Demand for a normal good (i.e. eating out) is positively related to income an increase in income causes an increase in quantity demanded at each price, shifts D curve to the right Demand for an inferior good (McDonald’s) is negatively related to income An increase in income shifts D curves for inferior goods to the left o Prices of related goods Prices for what is seen as alternatives will affect price
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This note was uploaded on 02/17/2011 for the course ECON 011 taught by Professor Yezer during the Fall '07 term at GWU.

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03 Demand and Supply- A Closer Look - Demand and Supply: A...

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