COMM 220 Lecture Notes - Lecture 2: Demand Curve, Complementary Good, Market Price
2 Dec 2014
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Document Summary
Chapter 2 the basics of supply and demand. Key concepts and topics: supply and demand, the market mechanism, changes in market equilibrium, elasticities of supply and demand, understanding and predicting the effects of changing market conditions, effects of government intervention price controls. Supply and demand: why and how prices change. How world economic conditions affect market price and production: what happens when the government intervenes in a competitive market. The impact of price controls, minimum wages, price supports, and production incentives on the economy. How taxes, subsidies, tariffs and import quotas affect consumers and producers. The supply curve slopes upward demonstrating that at higher prices more firms are able and willing to increase output. 1: when the supply-determining factors change, say, lower (higher) production costs, the entire supply curve shifts to the right ( left). Therefore, greater (lesser) quantity supplied at the same price, or same quantity supplied at a lower (higher) price. Price change movement along the supply curve.
