ECN E102 Lecture Notes - Lecture 6: Normal Good, Luxury Goods, Inferior Good
Document Summary
Ceteris paribus: all other things held equal/constant. Demand curve: the relationship between price and quantity demanded. Quantity demanded: the total amount of a good that buyers are willing and able to purchase given a price per unit of time (scalar) Value on the horizontal axis of the demand curve; x-coordinate. Law of demand: the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. Demand schedule: a table that shows the relationship between the price of a good and the quantity demanded. Need a time factor attached in order to give it meaning. Demand: total functional relationship between price and quantity demanded. How consumers respond to a set of different possible prices. Relationship must be estimated using trial and error (also surveys) try a series of different prices and see what happens to quantity demanded.
