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Lecture 2 - Q1 Does"supply in supply curve mean supply from...

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Q1 : Does "supply" in supply curve mean supply from a particular company or supply in the whole market? Answer : In this introductory chapter, I have only considered the market as a whole. Hence, supply refers here to market supply. We will see later on that we can also consider the supply curve of an individual firm. Q2 : On the price of complements, would a change in the price of helmets affect the demand curve for bicycles? Answer : Not in this particular case. In this example, bicycles drive the demand for helmets, but the relationship is not reciprocal: you may buy a helmet if you buy a bicycle to protect yourself, but there is no reason why you would buy a bicycle if you buy a helmet. In some other cases, the relationship could be reciprocal (application: air travel and hotel rooms). Q3 : On reservation price, clarification needed for slide 17. Answer : This slide is meant to explain why the demand curve shows the marginal buyer's reservation price.
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