{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

251Ch3lecture3Notes

251Ch3lecture3Notes - demand for tea Ch3 Demand and Supply...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
8/28/2011 1 1 Chapter 3: Demand and Supply Lecture 3: Shifts in demand Ch3: Demand and Supply Lecture 3: Shifts in demand 2 Determinants of Demand Demand increase: Shift to right Demand decrease: Shift to left P Q D D’ P Q D D’ Ch3: Demand and Supply 3 Changes (shifts) in Demand 1. Income Normal goods : goods where demand rises when income rises and falls when income falls Inferior goods : goods where demand rises when income falls and demand falls when income rises Ch3: Demand and Supply 4 Changes in Demand, continued 2. Prices of related goods Substitutes = Goods that are used in place of one another ex.) Coffee vs Tea Increase in the price of coffee increases the demand for tea
Image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern