ECON 1116 Chapter Notes - Chapter 4: Shortage, Market Clearing, Economic Equilibrium
8 Mar 2015
School
Department
Course
Professor
Document Summary
Chapter 4: the market focus of supply and demand 9/29/14 3:47 pm. Supply and demand are the forces that make the economy work. Determine quantity to produce and price at which to sell. Quantity demanded the amount of the good that buyers are willing and able to purchase: one determinate of quantity demanded: price. Demand schedule a table that shows the relationship between the price of a good and the quantity demanded, holding constant everything else that influences how much of the good the consumer buys. Shifts right: decrease in demand change that reduces the quantity demanded at every price, shifts left, variables that shift the demand curve. Normal good if demand falls when income falls. Inferior good if demand for the good rises when income falls. Substitutes pairs of goods used in place of each other: hot dog/ hamburger, sweater/sweatshirt, ex. price of froyo increases, so demand for froyo decreases, and demand for ice cream increases.
