Demand analysis II

Demand analysis II - SessionV:DemandanalysisII PGPI TermI

Info iconThis preview shows pages 1–16. Sign up to view the full content.

View Full Document Right Arrow Icon
Session V: Demand analysis II PGP I Term I
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Indifference curve in 3- dimensional space G 2 G 1 Ordinal utility level IC5=U5 IC4=U4 IC3=U3 IC2=U2 IC1=U1
Background image of page 2
Income-substitution effect Normal goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Income-substitution effect Inferior goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Background image of page 4
Income-substitution effect Giffen goods Substitution  effect A B C BL1 BL2 BL3 Income effect G1 G2
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Percentage change in quantity demanded of a  good resulting from one percent change in its  price For a linear demand curve: Price elasticity of demand q p p q p p q q × = = / / ε 1 ; 2 If , 0 if ; 0 , 0 If = = -∞ = = = = - - = - = - = b a p q p bp a bp q bp bp a q
Background image of page 6
Linear demand curve 2 4 4 8 q p | | =∞ ε | | =-1 ε | | =0 ε q=8-2p
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 12
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 14
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 16
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 16

Demand analysis II - SessionV:DemandanalysisII PGPI TermI

This preview shows document pages 1 - 16. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online