Two Approaches to Demand

Two Approaches to Demand - Two Approaches to Demand The...

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Two Approaches to Demand The Graphical Approach Economists graphically represent the relationship between product price and quantity demanded with a demand curve. Typically, demand curves are downwards sloping, because as price increases, buyers are less likely to be willing or able to purchase whatever is being sold. Each individual buyer can have their own demand curve, showing how many products they are willing to purchase at any given price, as shown below. This graph shows what Jim's demand curve for graham crackers might be: Jim's Demand Curve for Graham Crackers To find out how many boxes of graham crackers Jim will buy for a given price, extend a perpendicular line from the price on the y-axis to his demand curve. At the point of intersection, extend a line from the demand curve to the x-axis (perpendicular to the x-axis). Where it intersects the x-axis (quantity) is how many boxes of graham crackers Jim will buy. For instance, in the graph above, Jim will buy 3 boxes when the price is $2 a box.
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This note was uploaded on 02/09/2012 for the course ECO ECO2013 taught by Professor Jominy during the Fall '08 term at Broward College.

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Two Approaches to Demand - Two Approaches to Demand The...

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