# Chapter 4 - Chapter 4 The Market Forces of Supply and...

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Chapter The Market Forces of Supply and Demand 4

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Markets and Competition 22
Demand 33

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Demand 44
Figure Demand curve Catherine’s demand schedule 55 The demand schedule is a table that shows the quantity demanded at each price. The demand curve, which graphs the demand schedule, illustrates how the quantity demanded of the good changes as its price varies. Because a Price of Ice-cream cone Quantity of Cones demanded \$0.00 0.50 1.00 1.50 2.00 2.50 3.00 12 cones 10 8 6 4 2 0 0 1 2 1 0 1 1 9 1 2 3 4 5 6 7 8 Quantity of Ice-Cream Cones \$ 3 . 0 0 2 . 5 0 2 . 0 0 1 . 5 0 1 . 0 0 0 . 5 0 Pri ce of Ice - Cr ea m Co ne s 1. A decrease in price . . . 2. . . . increases quantity of cones demanded.

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Demand 66
Figure Market demand as the sum of 77 Price of ice-cream cone Catherin e Nichola s Marke t \$0.00 0.50 1.00 1.50 2.00 2.50 3.00 12 10 8 6 4 2 0 + 7 6 5 4 3 2 1 = 19 16 13 10 7 4 1 The quantity demanded in a market is the sum of the quantities demanded by all the buyers at each price. Thus, the market demand curve is found by adding horizontally the individual demand curves. At a price of \$2.00, Catherine demands 4 ice-cream cones, and Nicholas demands 3 ice-cream cones. The quantity demanded

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Figure Market demand as the sum of 88 DCather ine 0 12 10 11 9 1 2 3 4 5 6 7 8 Quantity of Ice-Cream Cones \$ 3 . 0 0 2 . 5 0 2 . 0 0 1 . 5 0 1 . 0 0 0 . 5 0 P r i c e o f I c e C r e a m C o n e s Catherine ’s demand D Ni ch ola s 0 1 2 3 4 5 6 7 Quantity of Ice-Cream Cones \$ 3 . 0 0 2 . 5 0 2 . 0 0 1 . 5 0 1 . 0 0 0 . 5 0 P r i c e o f I c e C r e a m C o n e s Nicholas’ s demand + = DM arke t 0 18 2 4 6 8 10 12 14 16 Quantity of Ice-Cream Cones \$ 3 . 0 0 2 . 5 0 2 . 0 0 1 . 5 0 1 . 0 0 0 . 5 0 P r i c e o f I c e C r e a m C o n e s Market deman d
Demand 99

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Figure Shifts in the demand curve 10 Pr ic e of Ic e- C re a m C o n es Quantity of Ice-Cream Cones 0 Deman d curve, D1 Deman d curve, D3 Deman d curve, D2 Increase in Demand Decrease in Demand Any change that raises the quantity that buyers wish to purchase at any given price shifts the demand curve to the right. Any change that lowers the quantity that buyers wish to purchase at any given price shifts the demand curve to the left.
Demand 11

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Demand 12
Demand 13

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Demand 14
Table Variables that influence 15 Variable A Change in This Variable . . . Price of the good

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## This note was uploaded on 03/29/2011 for the course ECON 211 taught by Professor Bass during the Winter '11 term at Grand Valley State University.

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Chapter 4 - Chapter 4 The Market Forces of Supply and...

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