ECO 1302 Chapter 4: Chapter 4 summary

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Chapter 4: supply a(cid:374)d de(cid:373)a(cid:374)d a(cid:374) i(cid:374)itial look su(cid:373)(cid:373)ary. The quantity of a product that is demanded is not a fixed number. Rather, quantity demanded depends on such factors as the price of the product, consumer incomes, and the prices of other products. The relationship between quantity demanded and price, holding constant all other things, can be displayed graphically on a demand curve. For most products, the higher the price, the lower the quantity demanded. As a result, the demand cure usually has a negative slope. The quantity of a product that is supplied depends on its price and many other influences. A supply curve is a graphical representation of the relationship between quantity supplied and price, holding constant all other influences. For most products, supply curves have positive slopes, meaning that higher prices lead to supply of greater quantities.

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