FIN30210 Lecture Notes - Lecture 4: Lagrange Multiplier, Marginal Utility, Demand Curve
Document Summary
Lesson 3: the essentials of supply and demand - in addition to powerpoint. Changes in one market have ripple effects elsewhere, and those effects come back to the original market. Change in utility is smaller (even if utility itself is going up) Now if you"re paying the same price for every item, you won"t keep buying. So in order for sellers to keep selling, products have to go down in price. Slope in a linear demand curve is negative, it goes down. Flip price and quantity only on the graph in an inverse relationship. Price or quantity changes are the only thing that moves us along the demand curve. Compliments: as the price of one goes up, the price of the other goes down (check)
