demand_and_supply

demand_and_supply - Demand, Supply, Equilibrium Demand )...

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Unformatted text preview: Demand, Supply, Equilibrium Demand ) Demand determinants:- Tastes- Information- Price of the other goods (substitutes, complements)- Income- Government rules and regulation (taxes, bans...)- Price ) Demand curve:- Quantity wanted at each price, holding the other factors constant- The other determinants shift the demand curve ) Demand function:- Implicit: Q D p , other factors - Explicit (linear, only factor Y income): Q a " bp cY- Keeping shifters constant: Q D p and Q a cY " bp d " bp- Intercept and slope, interpretation of the slope, the "Law of Demand"- Inverse demand function: p d b " 1 b Q- Summing demands: Q Q 1 Q 2 D 1 p D 2 p Supply ) Supply determinants:- Cost of factors used to produce the good (and role of innovation)- Government rules and regulation (environment, insurances...)- Price ) Supply curve- Quantity that firms want to sell at each price, holding constant the other factors (positive slope/horizontal and vertical curves)- Other factors shift the supply curve )...
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This note was uploaded on 02/06/2012 for the course ECONOMICS 201 taught by Professor Jaumandreu during the Fall '09 term at BU.

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demand_and_supply - Demand, Supply, Equilibrium Demand )...

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