econ 211 lecture 4

econ 211 lecture 4 - Econ 211 Lecture 4 The Demand...

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Econ 211 Lecture 4 Patrick McLaughlin Lecture 4 The Demand Curve (again) Graph: (in class) Movement along the demand curve is a response to a change in price. This is a “change in quantity demanded”, in accordance with the law of demand. Movement of the demand curve is “change in demand.” This happens when a ceteris paribus condition changes. Ceteris Paribus Conditions for demand 1. The prices of related goods Substitutes – good that can be used in place of another good. E.g. pen for pencil, Busch Light for PBR. Perfect substitutes: good that can be used in place of another good without losing any of the properties of the original good. E.g. Cable internet and DSL (if they both go the same speed and are equally stable). Pretty much depends on consumer’s preferences. Complements – goods that go well together. I.e. goods that are typically used together. Examples: Hamburgers and buns. Spaghetti and sauce.
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