MGMT 4A Lecture Notes - Lecture 4: Oatmeal, Corn Flakes, Demand Curve
Document Summary
Mgmt 4a lesson 2, part 1: the law of demand, income-substitution. Module 1: the law of demand, income substitution effects, demand curve shift. Equilibrium = the point in which the supply and demand curve crosses. Keypoint: understanding market shifts in the demand and supply curves is a key element of business strategy. Price - label on the vertical axis. Quantity - label on the horizontal axis. Lower the price, the more people will buy. The more quantity, the higher the price. Equilibrium - the point in which the link crosses. Small change in price results in a law change in demand. Large price change result in a small change for demand. Both the demand and supply curve can ship inward and outward as well. Key point: ceteris paribus means holding all other things constant. Example: if price of beef increases, consumers will buy chicken instead.
