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Unformatted text preview: This method is called horizontal addition because you look at a price level, and add the separate quantities demanded across that price level, giving you total quantity demanded for that price. There are many factors that can affect demand quantity, including income, prices, and preferences. Let's look at one good to see how this works. How much are you willing to pay for a cold soda? If you recently got a raise at your job, you might not mind buying a pricier soda, even if you don't need it. Your friend who has less money, however, might pick a generic brand, or they might stick with tap water. Below are possible demand curves for you (with your big raise) and your friend (without your big raise). Note that you are willing to buy more soda than your friend is: What if soda cost a dollar yesterday and costs two dollars today? That might make you What if soda cost a dollar yesterday and costs two dollars today?...
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This note was uploaded on 12/13/2011 for the course ECO 1320 taught by Professor Staff during the Fall '11 term at Texas State.
- Fall '11