ECON 1000 Lecture Notes - Lecture 4: Invisible Hand, Normal Good, Inferior Good
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When price goes up, quantity demanded goes down. When price goes down, quantity demanded goes up: the demand curve shows the relation between price and quantity demanded, holding other things constant. It provides the maximum price consumer will pay for an additional unit of a good or service. Downward-sloping / negatively-sloping, (q = a b p) or ( Change in the quantity demanded a movement along the demand curve that occurs in response to a change in price. Q: shift in demand or change in demand a shift of the entire demand curve that occurs in response to the following factors (not price): tastes, population (# of buyers), income, It provides the minimum price the producer requires to produce an additional unit of output. Upward-sloping / positively-sloping, (q = a + b p) or ( Quantity is the amount bought and sold at the equilibrium prices. Equilibrium price is not inherently good or bad.