FARE 1300 Lecture Notes - Lecture 7: Demand Curve

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A car and gasoline e. g an ipad vs a playbook. Demand curve: for an individual or group of individuals. Change in demand is when something other than the price of something changes like: preferences, expectations and perceptions. If you get a lot of money the demand curve is going to shift to the right. If another company makes a better version, the demand curve will shift to the left. Quantity demanded: how much will be purchased at a specific price. Change in demand: a shift in the relationship because income or some other price has changed. Change in quantity of demanded: the different between how much will be purchased at one price compared to another price (own price) Demand curves have a negative slope with respect to own price. As price falls for one good, people will purchase more of it and less of its substitutes. Elasticity: measures the responsiveness to price as a pure number.

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