demand - MODEL OF DEMAND The model of demand is an attempt...

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Demand slide 1 MODEL OF DEMAND The model of demand is an attempt to explain the amount demanded of any good or service. DEMAND DEFINED The amount of a good or service a consumer wants to buy, and is able to buy per unit time.
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Demand slide 2 THE “STANDARD” MODEL OF DEMAND The DEPENDENT variable is the amount demanded. The INDEPENDENT variables are: the good’s own price the consumer’s money income the prices of other goods preferences (tastes)
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Demand slide 3 YOU COULD WRITE THE MODEL THIS WAY: The demand for tacos Q D (tacos) = D(P tacos , Income, P spaghetti , P beer , tastes)
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Demand slide 4 ECONOMISTS HAVE HYPOTHESES ABOUT HOW CHANGES IN EACH INDEPENDENT VARIABLE AFFECT THE AMOUNT DEMANDED
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Demand slide 5 THE DEMAND CURVE The demand curve for any good shows the quantity demanded at each price, holding constant all other determinants of demand. The DEPENDENT variable is the quantity demanded. The INDEPENDENT variable is the good’s own price.
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Demand slide 6 THE LAW OF DEMAND The Law of Demand says that a decrease in a good’s own price will result in an increase in the amount demanded, holding constant all the other determinants of demand. The Law of Demand says that demand curves are negatively sloped.
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slide 7 A DEMAND CURVE A demand curve must look like this, i.e., be negatively sloped. own
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demand - MODEL OF DEMAND The model of demand is an attempt...

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