ECON1101 Lecture Notes - Lecture 4: Ceteris Paribus, Demand Curve, Complementary Good
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ECON1101 Week 2 Lecture A
â—Ź Demand schedule: a table of prices (P) and quantity demanded (Qo) for a good
at different prices, all things being equal (ceteris paribus)
â—‹ E.g. Market Demand for eggs in Sydney
Prices per Egg (cents/egg)
Quantity of Eggs demanded per
week (millions)
10c
25
20c
20
30
15
40
10
50
5
â—Ź Law of Demand: Price increase -> Quantity demanded decreases (negatively
related)
â—Ź Demand curve: graph indicating quantity demanded at different prices
â—Ź A change in the price of the good itself leads to a movement along the demand
curve
â—Ź Other non-price factors are said to shift the demand (D) curve:
â—‹ Increase in demand -> Shift D curve to right
â—‹ Decrease in demand -> Shift D curve to left
â—Ź Factors affecting the demand curve:
â—‹ Change in tastes/preferences/information
â—‹ Change in income - for any price
â– If income increases -> demand increases (normal goods)
â– If income increases -> demand decreases (inferior goods)
â—‹ Change in prices of closely related goods
â– Substitute goods X and Y
â—Ź Goods that substitute for each other
â—Ź When the price of X rises (falls) the demand for Y increases
(decreases)
â– Complementary goods X and Y
â—Ź Goods which are usually consumed or used together
â—Ź When the price of X rises (falls) the demand for Y decreases
(increases)
â—‹ Change in the number of consumers or population
○ Change in consumers’ expectations of the future
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Document Summary
Demand schedule: a table of prices (p) and quantity demanded (qo) for a good. Econ1101 week 2 lecture a at different prices, all things being equal (ceteris paribus) Law of demand: price increase -> quantity demanded decreases (negatively related) Demand curve: graph indicating quantity demanded at different prices. A change in the price of the good itself leads to a movement along the demand curve. Other non-price factors are said to shift the demand (d) curve: Increase in demand -> shift d curve to right. Decrease in demand -> shift d curve to left. Change in income - for any price. If income increases -> demand increases (normal goods) If income increases -> demand decreases (inferior goods) Change in prices of closely related goods. When the price of x rises (falls) the demand for y increases (decreases) Goods which are usually consumed or used together. When the price of x rises (falls) the demand for y decreases (increases)