Lecture 6 (post)

# 15 to 30 this is referred to as a change in quantity

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Unformatted text preview: his case an “increase in quantity demanded.” • “Own-price” changes cause movements along a given demand curve. • QXD = f(PX) – Note: Law of Demand implies a negative or downward slope to the graph. – Note: In the graph we switched the axes. At P = \$25, the quantity demanded = 15. Movements versus Shifts: QXD = f(PX) given Ps, Pc, I, T&amp;P, Pop Price Demand 25 15 Quantity Movements vs. Shifts • QXD = f(PX) given Ps, Pc, I, T&amp;P, Pop • A movement along the demand curve for X would be caused by a change in Px. – Remember this is referred to as an increase or decrease in quantity demanded! • A shift of the entire demand curve would be caused by a change in one of the “ceteris paribus” demand variables. – This would be referred to as an increase or decrease in demand (at a given price). Movements: Change In Quantity Demanded • A change in the quantity demanded is a movement along the demand curve. When price falls to \$10, the quantity demanded increases to 30. Price Demand 25 10 15 30 Quantity Demand • When demand increases, the quantity demanded by buyers increases at every price. – Example: when demand increases, the quantity demanded at a price of \$25 rises from 15 to 25 units. • When demand decreases, the quantity demanded by buyers falls at every price. – Example: when demand decreases, the quantity demanded at a price of \$25 falls from 15 to 10 units. Increase In Demand • An increase in demand is a rightward shift in the entire curve. Price Demand New Demand 25 More is demanded at every price 15 25 Quantity Decrease In Demand • A decrease in demand is a leftward shift in the entire curve. Price Demand 25 • Less is demanded at every price New Demand 10 15 Quantity...
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## This note was uploaded on 10/01/2013 for the course ECON 1120 taught by Professor Wissink during the Spring '05 term at Cornell University (Engineering School).

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