Demand curve, substitutes, compliments, supply curve

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Department
Agriculture + Resrce Econ
Course
AREC 202
Professor
Christopher Goemans
Semester
Fall

Description
7 September Log onto Aplia during class Thursday Recall: Demand Relationship / locus of points relating price and quantity demanded Max WTP (willingness to pay) / value for each unit of a good Max quantity purchased at a given price What determines the location of the demand curve? What would shift the demand curve? Preferences If you hear cheeseburgers are bad for you… Demand curve shifts down if you like something less What would NOT shift demand? Prices Quantity Both are variables on the axes of the curve What shifts demand? Preferences Income Need (necessity – something that is required in order to achieve some objective) Prices of other things Substitutes Imagine cheeseburgers. If price of carl’s jr cheeseburgers goes up, demand for mcdonald’s goes up Price of substitues goes up, demand shift goes up Compliments Price of compliments goes up, demand goes down (bullets for a gun) Substitutes Items that can be easily substituted for each other E.g. Desert – Eagle .50 vs. S&W 500 If the price of one goes up you will buy more of the other Compliments Two items that work well together Guns and ammo Trucks and big tires
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