Matthew_McCoy_Week_2_Chapter_3_Assignment

Matthew_McCoy_Week_2_Chapter_3_Assignment - Matthew McCoy...

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

View Full Document Right Arrow Icon
Matthew McCoy ECON201 Week 2 Chapter 3 Assignment (#2) June 22, 2011 Professor John Volpe 1. Explain the law of demand. Why does a demand curve slope downward? How is a market demand curve derived from individual demand curves? The law of demand is the principle that, other things equal, an increase in a product’s price will reduce the quantity of it demanded, and conversely for a decrease in price. The demand curve slopes downward because it reflects the law of demand – people buy more of a product, service, or resource as its price falls. The relationship between price and quantity The market demand curve is basically summed horizontally the quantities demanded by the buyers on the market to obtain the total quantity demanded at that price; we then plot the price and the total quantity demanded as one point on the market demand curve. 2. What are the determinants of demand? What happens to the demand curve when any of these determinants change? Distinguish between a change in demand and a movement along a fixed demand curve, noting the cause(s) of each. The determinants of demand are factors that are assumed to be constant when a demand curve is drawn. The basic determinants of demand are consumers’ preferences, the number of
Background image of page 1

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

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

This note was uploaded on 09/24/2011 for the course ECON 202 taught by Professor Unknown during the Spring '08 term at Mountain State.

Page1 / 3

Matthew_McCoy_Week_2_Chapter_3_Assignment - Matthew McCoy...

This preview shows document pages 1 - 2. Sign up to view the full document.

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