ECON 1011 Lecture Notes - Lecture 6: Demand Curve, Whopper, Quarter Pounder
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Change in supply vs change in quantity supplied: change in quantity supplied is affected by change in number of consumers, change in supply is affected by changes in cost & number of firms. Shortage: pushes the price up, at /lbs, more people are willing to purchase tomatoes, creates a shortage of the good (when quantity of supply is lower than quantity of demand) Imagine a quarter pounder: equilibrium price at . 79, price of the whopper decreases, this would drive the price of the quarter pounder down and decrease the quantity sold due to the law of supply. Income increases: shifts demand curve outward (to the right, this increases the equilibrium price and increases the equilibrium quantity. 1: people see the success of pepsi and coke, number of firms in the market increases, this shifts the supply curve outward (to the right, this decreases the equilibrium price and increases the equilibrium quantity, eg.