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I. SECTION II – DEMAND a. Individual Demand i. Demand means the various amounts of a good which people are willing and able to buy at different prices when all other relevant things are held constant ii. Total expenditure by the consumer is given by prices times quantity (P*Q) iii. The Law of Demand states that when all other things are constant, the quantity demand varies inversely with price 1. When price goes up demand goes down, when price goes down demand goes up iv. A Market Demand Schedule represents the sum of the individual demands b. Demand and Quantity Demanded i. There are non-price factors that affect a good’s demand curve 1. Taste 2. Income 3. Prices of Other Goods ii. An increase in demand always means that the demand curve has shifted rightward iii. A decrease in demand is a leftward shift of the entire demand curve iv. A change in the quantity demanded can occur when the good’s own price causes the change 1. A decrease in price will cause an increase in the quantity demanded
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This note was uploaded on 04/10/2008 for the course ECON 1 taught by Professor Bergstrom during the Fall '07 term at UCSB.

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