01:220:102 Chapter Notes - Chapter 3: Demand Curve, Negative Relationship, Economic Equilibrium

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5 Mar 2019
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01:220:102 Full Course Notes
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01:220:102 Full Course Notes
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Competitive market- has many buyers and sellers of the same good and service. No one seller can influence the price. Supply and demand model shows how a competitive market behaves. Demand curve shows the quantity demanded at various prices. Quantity demanded- quantity that buyers are able to purchase at a particular price. Most of the time, lower prices cause quantity demanded to increase. Change in demand vs. change in quantity demanded. Negative relationship between price and quantity demanded. A decrease in demand is a leftward shift while an increase in demand is rightward shift. When the price of a good changes, we move along the demand curve. Everything else that influences demand shifts the demand curve. Factors that typically shift demand curves are: Change in the price of related goods or services. Substitutes- decrease in the price of one leads to a decrease in demand for the other.

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