Chapter 6

Chapter 6 - Chapter Six Demand Properties of Demand...

Info iconThis preview shows pages 1–20. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter Six Demand Properties of Demand Functions Comparative statics analysis of ordinary demand functions -- the study of how ordinary demands x 1 *(p 1 ,p 2 ,y) and x 2 *(p 1 ,p 2 ,y) change as prices p 1 , p 2 and income y change. Own-Price Changes How does x 1 *(p 1 ,p 2 ,y) change as p 1 changes, holding p 2 and y constant? Suppose only p 1 increases, from p 1 ’ to p 1 ’’ and then to p 1 ’’’. x 1 x 2 p 1 = p 1 ’ Fixed p 2 and y. p 1 x 1 + p 2 x 2 = y Own-Price Changes Own-Price Changes x 1 x 2 p 1 = p 1 ’’ p 1 = p 1 ’ Fixed p 2 and y. p 1 x 1 + p 2 x 2 = y Own-Price Changes x 1 x 2 p 1 = p 1 ’’ p 1 = p 1 ’’’ Fixed p 2 and y. p 1 = p 1 ’ p 1 x 1 + p 2 x 2 = y x 2 x 1 p 1 = p 1 ’ Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’) Own-Price Changes p 1 = p 1 ’ Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’) p 1 x 1 *(p 1 ’) p 1 ’ x 1 * Own-Price Changes Fixed p 2 and y. p 1 = p 1 ’ x 2 x 1 x 1 *(p 1 ’) p 1 x 1 *(p 1 ’) p 1 ’ p 1 = p 1 ’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) p 1 ’ p 1 = p 1 ’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 = p 1 ’’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’’’) x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 = p 1 ’’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’’’) x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 ’’’ x 1 * Own-Price Changes Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’’’) x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 ’’’ x 1 * Own-Price Changes Ordinary demand curve for commodity 1 Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’’’) x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 ’’’ x 1 * Own-Price Changes Ordinary demand curve for commodity 1 Fixed p 2 and y. x 2 x 1 x 1 *(p 1 ’’’) x 1 *(p 1 ’) x 1 *(p 1 ’’) p 1 x 1 *(p 1 ’) x 1 *(p 1 ’’’) x 1 *(p 1 ’’) p 1 ’ p 1 ’’ p 1 ’’’ x 1 * Own-Price Changes Ordinary demand curve for commodity 1 p 1 price offer curve Fixed p 2 and y. Own-Price Changes The curve containing all the utility- maximizing bundles traced out as p 1 changes, with p 2 and y constant, is the p 1- price offer curve ....
View Full Document

{[ snackBarMessage ]}

Page1 / 121

Chapter 6 - Chapter Six Demand Properties of Demand...

This preview shows document pages 1 - 20. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online