Chap003.9 - Changes in Prices and Quantities ± A Change In...

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9 Chapter 3 - Supply and Demand: An Introduction Slide 49 Predicting and Explaining Changes in Prices and Quantities ± How will an increase in airfares affect inter-city bus fares and the price of hotel rooms in resort communities? Chapter 3 - Supply and Demand: An Introduction Slide 50 The Effect of a Federal Pay Raise on the Rent for Conveniently Located Apartments in Washington D.C. Rent (dollars per month) Conveniently located apartments (units per month) D P Q S P’ Q’ D’ Chapter 3 - Supply and Demand: An Introduction Slide 51 Predicting and Explaining Changes in Prices and Quantities ± A Change In Income z Normal Good ² One whose demand increases (decreases) when the incomes of buyers increase (decrease). Chapter 3 - Supply and Demand: An Introduction Slide 52 Predicting and Explaining
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Unformatted text preview: Changes in Prices and Quantities ± A Change In Income z Inferior Good ² One whose demand decreases (increases) when the incomes of buyers increase (decrease). ² Can you think of an example of an inferior good? Chapter 3 - Supply and Demand: An Introduction Slide 53 The Effect of the Release of Jurassic Park on the Market for Toy Dinosaurs Price Toy Dinosaurs (units per month) P Q D S D’ P’ Q’ D’ = demand after release of movie Chapter 3 - Supply and Demand: An Introduction Slide 54 The Effect of a Credible Rumor on the Market for Apple Macintosh Computers Price Apple Computers (units per month) P Q S D P’ Q’ D’ D’ = demand after rumor of cheaper model soon to be released...
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