Log in
HomeClass Notes1,200,000CA670,000

ECN 104 Lecture Notes - Lecture 3: Economic Equilibrium, Shortage, Demand Curve

27 views5 pages
pinksheep369
27 Feb 2016
School
Ryerson University
Department
Economics
Course
ECN 104
Professor
John Isbister

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Demand curve is the graphical representation of the demand schedule. It shows how much of a good or service consumers want to buy at any given price. Changes in the prices of related goods. Substitutes: two goods are substitutes if a fall in the price of one of the goods makes consumers less willing to buy the other good. Complements: two goods are complements if a fall in the price of one good makes people more willing to buy the other good. Normal goods: when a rise in income increases the demand for a good the normal case we say that the good is a normal good. Inferior goods: when a rise in income decreases the demand for a good, it is an inferior good. A movement along the demand curve is a change in the quantity demanded of a good that is the result of a change in that good"s price.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

ECN 104 Lecture Notes - Lecture 2: Demand Curve, Economic Equilibrium, Inferior Good
orchidrat16
ECN 104 Lecture Notes - Lecture 2: Demand Curve, Inferior Good, Normal Good
silverpig187
ECN 104 Lecture Notes - Lecture 3: Inferior Good, Economic Equilibrium, Demand Curve
lilacdeer722

Related Questions

Changes in demand factors other than the price of the good would result in a change in demand.
  a. An increase in demand is depicted as a rightward shift in the demand curve.
  b. An increase in demand means that consumers plan to purchase more of the good at each possible price.
  c. A decrease in demand is depicted as a leftward shift of the demand curve
  d. A decrease in demand means that consumers plan to purchase less of the good at each possible price.

Question 1:-
If new manufacturers enter the computer industry, the [a] curve will [b] to the [c].
----------------------------------------
Question 2:-
Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect Andy's demand for [a] to [b].
----------------------------------------

Question 3:-

Various factors cause the demand curve to shift. These can include:

A.

change in income
B.

changes in the number of buyers
C.

changes in future expectations
D.

all of the above.

----------------------------------------

Question 4:-

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the .

A.

demand curve to the right
B.

supply curve to the right
C.

supply curve to the left
D.

demand curve to the left

Demand curve:

The demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at any given price. It is a graphic representation of a market demand schedule. The demand curve for all consumers together follows from the demand curve of every individual consumer: the individual demands at each price are added together, assuming independent decision-making. Demand curves are used to estimate behaviors in a competitive market and are often combined with supply curves to estimates the equilibrium price. Demand curves are usually considered as theoretical structures that are expected to exist in the real world, but real-world measurements of actual demand curves are difficult and rare.

The demand curve will move downward from the left to the right, which expresses the law of demand.

If the price of corn rises, consumers will have an incentive to buy less corn and substitute other foods, so the total quantity of corn consumers’ demand will fall. The degree to which rising price translates into falling demand is called demand elasticity or price elasticity of demand. If a factor besides price or quantity changes, a new demand curve needs to be drawn. For example, say that the population of an area explodes, increasing the number of mouths to feed. In this scenario, more corn will be demanded even if the price remains the same, meaning that the curve itself shifts to the right.          

According to my view, the demand curve for the Apple Video iPod will increase. According to the given paragraph iPod is thinner and lighter. The hardware and software ecosystem offers good content options and also portable. These are the main qualities expected by the customers. Henceforth customer wants to buy this product in the future also. If the price of the product increases in the future the demand for the product also increases because customers demand more products thinking of price increase in the future. At the same time if the price decreases in this case also customers will buy the product because they think that the good product is coming at a reasonable price. The demand curve for Apple Video iPod in the future may be like follows.

What is your opinion on a competitor product which has similar features to that of an i-pad or say it is better than i-pad and is offered at a comparatively cheaper price, how this will affect the i-pad demand curve and why?