Class Notes (1,100,000)
CA (620,000)
Ryerson (30,000)
ECN (1,000)
ECN 104 (400)
Lecture 3

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


Department
Economics
Course Code
ECN 104
Professor
John Isbister
Lecture
3

This preview shows page 1. to view the full 5 pages of the document.
Demand Curve and Schedule
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
Shift of the demand curve is a change in the quantity demanded at any given price,
represented by the change of the original demand curve to a new position, denoted by a
new demand curve
1. An “increase in demand” means a rightward shift of the demand curve: at any
given price, consumers demand a larger quantity than before.
2. A decrease in demand” means a leftward shift of the demand curve: at any
given price, consumers demand a smaller quantity than before
Cause for Shifts
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.
Changes in Income
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.
Changes in Tastes
Changes in Expectations
Changes in the Number of Consumers
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.
The market demand curve is the horizontal sum of the individual demand curves of all
consumers in that market.
“Law of Demand:” As price falls, quantity demanded rises.
If another factor influencing demand—other than its own price—changes, demand
changes, and we get an entirely new demand curve.
You're Reading a Preview

Unlock to view full version

Only page 1 are available for preview. Some parts have been intentionally blurred.


Quanty supplied: 

usually upward
sloping
movement along the supply curve
!
"
#$%$
S&S'()&&*%
AS&&'%CS'
+$,
Changes in input prices

Changes in the prices of related goods and services
Changes in weather
Changes in technology
Changes in expectaons
$$
"$

Changes in the number of producers
The market supply curve is the horizontal sum
-

You're Reading a Preview

Unlock to view full version