Ch03Spring2011

What are the determinants of demand demand 1 price of

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: Price of the product [P(x)] 2. Non-price determinants of 2. demand (see list next slide) demand 8 NON-PRICE DETERMINANTS NON-PRICE OF DEMAND OF 1. Tastes and Preferences Tastes 2. Income 3. Price Expectations 4. Prices of related goods A. Complements B. Substitutes 5. Number of buyers 9 LAW OF DEMAND: PRICE AND LAW QUANTITY ARE INVERSELY RELATED, (all other things equal) equal) A change in the P(x) causes change movement along a given demand schedule Substitution effect Real Income effect A change in the P(x) cannot cause change cannot a shift of the demand schedule for X. X. A change in P(x) causes a change change in the quantity demanded. quantity 10 10 AN INDIVIDUAL BUYER’S DEMAND AN FOR COMPACT DISCS: Text, page 56 56 Figure 3.1 CHANGES IN NONPRICE CHANGES DETERMINANTS OF DEMAND DETERMINANTS...
View Full Document

Ask a homework question - tutors are online