ECON101 Lecture Notes - Lecture 5: Demand Curve, Economic Equilibrium

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26 Aug 2016
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ECON101 Full Course Notes
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As the number of buyers increase, demand increases. Population may remain constant and buyers may increase. Normal goods as incomes rise, demand rise b. ) Inferior goods as incomes increase, demand decreases. Supply the supply function shows the quantity of a good supplied at different prices given the technology, the prices of the inputs and other relevant variables. Quantity supply: amount producers are willing to sell during a given time period. Law of supply: as the price of a commodity increases/decreases, the quantity supplied increases/decreases ceteris parabus. Changes in the commodity"s price correspond to movements along the supply curve which are referred to changes in quantity supplied. Variables that influence supply variables that cause the curve to shift inward/outward: technology. You can improve in technology that increases demand but not supply i. e. cellphone. A better (cheaper) technology allows the producers to increase supply. Costs of inputs (wages, interest rates, energy prices, )

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