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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
– Note: In the graph we
switched the axes. At P = $25,
demanded = 15.
QXD = f(PX)
given Ps, Pc, I, T&P, Pop Price
Demand 25 15 Quantity Movements vs. Shifts
• QXD = f(PX) given Ps, Pc, I, T&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
– 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
demanded is a
the demand curve.
When price falls
to $10, the
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).
- Spring '05