ECON 103 Lecture Notes - Lecture 10: Demand Curve
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13 Dec 2017
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A market demand curve: the horizontal summation of all individual demand curves. Note that the market demand curve is more elastic than the individual demand curves. Because quantity demanded increases with a fall in price for tow reasons. Substitution as price falls, each buys more if in the market. As the price falls, new people enter the market. What would happen if there were goods that only had 0/1 choices. Ethier you were in, or out of the market. Special type of demand curves, with a demand of 0/1. Marginal value and total value is the same, (area is both 30) The advantage of this is we can talk about market demand curve for discrete behavior. Does a reduction in the punishment for murder mean that everyone will commit a murder. No but some will (those who are indifferent) Change the divorce law and only some divorce. In order to find the equilibrum we need to find the market supply.
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