ECON 2304 Lecture 2: Lecture 2
Document Summary
Market: two individuals (seller and a buyer) is considered a market, summation of individual demand curves. Change in demand: when the demand curve shifts right or left, cause by a change in the determinants of demand. Substitutes and compliments change in quantity demanded: cause by a change in the price. Supply curve: the law of supply. Shifting the supply curve left or right. Caused by the determinants of supply: change in quantity supply. A price change within the market you are talking about creates a move along the curve and not a move of the curve. Increase in supply vs. increase in quantity supplies. Increases in supply come from non price changes that increase the quantity supplied at every price. Increase in quantity supplied come from a raising of the price. Six non price determinants of supply: taxes, subsidies, resource costs, use of technology, number of sellers, expectations of future prices.