Demand analysis

Demand analysis - SessionIV:Demandanalysis PGPI TermI

This preview shows pages 1–9. Sign up to view the full content.

Session IV: Demand analysis PGP I Term I

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

View Full Document
Budget line: Change in Price G1 G 2 100 50 Budget line:  100G1+50G2=5000 Budget line: 50G1+50G2=5000 100 25 Budget line:  200G1+50G2=5000
Derivation of Demand curve q2 q1 q1 p1 d1 200 100 50 20 45 80 q1=q1(p, I) PCC

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

View Full Document
Depicts the relationship between price and  quantity demanded at that price We achieve higher level of utility as we move  along demand curve MRS=Price ratio falls as we move along the  demand curve.  Demand curve:
Change in demand-shift in demand schedule Change in quantity demanded-Movement along  demand curve A linear Demand curve bp a q - = Shift parameter  (e.g. Income) Slope parameter  (price)

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

View Full Document
Income Price of related goods Tastes Expectations Demand curve shift
Budget line: Change in Income G1 G2 100 50 60 120 Budget line:100G1+50G2=5000 Budget line: 100G1+50G2=6000 Budget line: 100G1+50G2=7000 140 70

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

View Full Document
Change in income q1 q1 q2 p1 d3 d2 d1 ICC 100
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/01/2012 for the course STRATEGY Om121 taught by Professor Abhinavdhar during the Spring '12 term at Harvard.

Page1 / 18

Demand analysis - SessionIV:Demandanalysis PGPI TermI

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online