5_MarketDemand_ConsumerSurplus

5_MarketDemand_ConsumerSurplus - MARKET DEMAND CONSUMER...

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ARKET DEMAND MARKET DEMAND CONSUMER SURPLUS Pindyck & Rubinfeld 4.3, 4.4
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Market Demand Individual demand Market demand : the relationship between price & the total quantity demanded (by ll individuals together) all individuals together)
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Drawing the market demand curve draw the market demand curve, To draw the market demand curve, add up the quantities demanded. o not add up the prices! Do not add up the prices! This is called horizontal summation . As more consumers enter the market, the market demand will shift to the right.
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asticity Elasticity : the responsiveness of some variable (x) to a change in some other variable (y). (own) price elasticity of demand income elasticity of demand cross price elasticity of demand Demand can be t i h t h t h i i i elastic: x changes by a lot when there is an increase in y. inelastic:
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This note was uploaded on 07/30/2011 for the course ECO 112 taught by Professor Man during the Spring '11 term at HKU.

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5_MarketDemand_ConsumerSurplus - MARKET DEMAND CONSUMER...

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