ECO 105 Lecture Notes - Lecture 2: Ceteris Paribus, Demand Curve
Document Summary
Demanders: a person or group of people willing and able to make the purchase of a good or service. Law of demand: there is an inverse relationship between price and quantity demanded: a decrease in price causes an increase in quantity demanded, an increase in price causes a decrease in quantity demanded. Ceteris paribus : all other relevant variables are held constant or equal. How changes in demand are shown on a graph: When quantity demanded increases, the demand curve will shift outward and to the right. When quantity demanded decreases, the demand curve will shift inward and to the left. Substitute goods: two goods which leave you with the same satisfaction. Example: turkey & chicken: when the price of turkey goes up, the quantity demanded of turkey goes down, and the demand of chicken goes up.