lec02 - Demand Demand and Supply Price Determines price of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Demand and Supply Determines price of each good and the amount that is sold. Example: Salmon! 2 Demand Price Quantity demanded $ 8 12,000 pounds $ 6 18,000 pounds $ 4 24,000 pounds Let’s graph these numbers. 3 The vertical axis is the PRICE of salmon, in dollars per pound. Price 4 Quantity The horizontal axis is the QUANTITY of salmon that consumers buy, in thousands of pounds. Price 9 Price Quantity $8 $6 $4 Demand This line is called the demand curve. 12 18 24 10 Price Quantity Demand Demand Curve Gives quantity that consumers buy at each price.
Background image of page 1

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

View Full DocumentRight Arrow Icon
12 Price Quantity Demand Law of Downward-Sloping Demand When price drops, the quantity demanded rises, all else held constant. P2 P1 Q2 Q1 14 Price Quantity Demand Law of Downward-Sloping Demand When price rises, the quantity demanded drops, all else held constant. P1 P2 Q1 Q2 15 Price Quantity Shifts in Demand Curve Rise in income causes demand curve for salmon to shift outward. 16 Price Quantity Shifts in Demand Curve New report showing that salmon is not so healthy demand curve to shift inward.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

lec02 - Demand Demand and Supply Price Determines price of...

This preview shows document pages 1 - 3. Sign up to view the full document.

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