lecture 7

# lecture 7 - LECTURE 7: DETERMINATION OF THE MARKET PRICE...

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2010: LECTURE 7 1 LECTURE 7: DETERMINATION OF THE MARKET PRICE (Cont) Movement along and shift of demand curve. Firm supply curve. Market supply curve. Movement along and shift of supply curve Mankiw: Chapter 4

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2010: LECTURE 7 2 MOVEMENT ALONG AND SHIFT OF CURVE Remember: demand curve is drawn ceteris paribus - holding everything else fixed. In homework: y=81 y=144 pxpx 3336 4144
2010: LECTURE 7 3 Each curve drawn - holding y constant - as p changes, move along curve. As y increased - at any given p, x increased. - curve shifts to right - draw new curve with dashes.

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2010: LECTURE 7 4 Quantity demanded depends on: price: p 8 , Q 9 - move along curve. income: income 8 ; (holding soup price constant) either Q 8 - curve shifts to right - normal good. or Q 9 - curve shifts to left - inferior good.
2010: LECTURE 7 5 price of related goods: price of hamburgers 8 ; (holding soup price constant) Q 8 - curve shift to right - substitutes. price of sandwiches 8 ; (holding soup price constant) Q 9 - curve shift to left - complements.

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## This note was uploaded on 10/29/2011 for the course ECON 2010 taught by Professor Mertens,wi during the Spring '07 term at Colorado.

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lecture 7 - LECTURE 7: DETERMINATION OF THE MARKET PRICE...

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