4_Supply_and_Demand

4_Supply_and_Demand - Demand and Supply CHAPTER 4 CHECKLIST...

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Demand and Supply CHAPTER 4
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When you have completed your study of this chapter, you will be able to C H E C K L I S T Distinguish between quantity demanded and demand and explain what determines demand. 1 Distinguish between quantity supplied and supply and explain what determines supply. Explain how demand and supply determine price and quantity in a market and explain the effects of changes in demand and supply. 2 3
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COMPETITIVE MARKETS A market is any arrangement that bring buyers and sellers together. A competitive market has so many buyers and so many sellers that no individual buyer or seller can influence the price.
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4.1 DEMAND Quantity demanded The amount of a good, service, or resource that people are willing and able to buy during a specified period at a specified price. Demand The relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same.
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4.1 DEMAND Law of Demand Other things remaining the same, If the price of the good rises, the quantity demanded of that good decreases. If the price of the good falls, the quantity demanded of that good increases.
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4.1 DEMAND
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4.1 DEMAND Individual Demand and Market Demand Market demand The sum of the demands of all the buyers in a market. The market demand curve is the horizontal sum of the demand curves of all buyers in the market.
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4.1 DEMAND
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4.1 DEMAND Changes in Demand Change in demand Demand changes when any influence other than the price of the good changes. A change in demand means that we need a new demand curve (Demand curve should be shifted).
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4.1 DEMAND Figure 4.3 shows changes in demand. 1. When demand decreases, the demand curve shifts leftward from D 0 to D 1 . 2. When demand increases, the demand curve shifts rightward from D 0 to D 2 .
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4.1 DEMAND The main influences on buying plans that change demand are Prices of related goods Income Expectations Number of buyers Preferences
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4.1 DEMAND Substitute A good that can be consumed in place of another good. The demand for a
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4_Supply_and_Demand - Demand and Supply CHAPTER 4 CHECKLIST...

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