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Unformatted text preview: demand for tea Ch3: Demand and Supply 5 Changes in Demand, continued ▪ Complements = Goods that are used together ex.) Coffee and cream Increase in the price of coffee decreases the demand for cream Ch3: Demand and Supply 6 Changes in Demand, continued 3. Changes in expectations ▪ Price expect price to rise → ↑ current demand expect price to fall → ↓ current demand ▪ Income expect income to rise → ↑ D for normal goods and ↓ D for inferior goods 8/28/2011 2 Ch3: Demand and Supply 7 Changes in Demand, continued 4. Tastes and Preferences 5. Number of Buyers more buyers → ↑ D fewer buyers → ↓ D...
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This note was uploaded on 09/21/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.
- Spring '08