ECN 104 Chapter Notes - Chapter 3: Marginal Utility, Demand Curve, Complementary Good
28 Mar 2016
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Demand: a schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time. Demand shows the quantities of a product that will be purchased at various possible prices. Refer to second paragraph in relation to figure 3-1 on page 53. Law of demand: other things equal, as price falls the quantity demanded rises, and as price rises the quantity demanded falls. Other things equal refers to other factors that play into the law of demand such as substitute products. The substitution effect: a change in the price of a product changes the relative expensiveness of that good and hence changes the willingness of consumers to buy it rather than other goods. Demand curve: a curve illustrating the inverse (negative) relationship between the quantity demanded of a good or service and its price, other things equal.
