ECON 1001 Lecture Notes - Lecture 13: Hyperbola, Inverse Relation, Demand Curve

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rubyllama377

21 Mar 2018

School

Department

Economics

Course

ECON 1001

Professor

Erhardt

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Demand curve: it is graphic representation of demand schedule showing how quantity demanded of a commodity is related to its own price. The demand curve is downward sloping because of the inverse relation between price and demand. It can also be a rectangular hyperbola for a normal good it is generally downward sloping. Point e on demand curve shows that at price op the consumer is willing to buy oq quantity of good. Market demand curve is the horizontal summation of the individual demand curves. It shows various quantities of a commodity that all the buyers in the market are ready to buy at different possible prices of the commodity at a point of time. Note: both the graphs are based on the previous schedule given. Movement along the demand curve and shift of demand curve. When price increases from op to op1 the quantity demanded contracts to oq1. When price falls to op2 the quantity demanded expands to op2.

Related Questions

17) Suppose a downward-sloping demand curve intersects the horizontal axis at a point where quantity demanded equals 1250 units. What is the "value" that consumers place on the 1250th unit of this good? A) a negative value B) a positive value C) $0 D) $1250 E) it depends on the position of the supply curve The diagram below shows the market for litres of milk. Price Supply Demand Q1 Q0 Quantity FIGURE 5-8

Demand curve:

The demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at any given price. It is a graphic representation of a market demand schedule. The demand curve for all consumers together follows from the demand curve of every individual consumer: the individual demands at each price are added together, assuming independent decision-making. Demand curves are used to estimate behaviors in a competitive market and are often combined with supply curves to estimates the equilibrium price. Demand curves are usually considered as theoretical structures that are expected to exist in the real world, but real-world measurements of actual demand curves are difficult and rare.

The demand curve will move downward from the left to the right, which expresses the law of demand.

If the price of corn rises, consumers will have an incentive to buy less corn and substitute other foods, so the total quantity of corn consumers’ demand will fall. The degree to which rising price translates into falling demand is called demand elasticity or price elasticity of demand. If a factor besides price or quantity changes, a new demand curve needs to be drawn. For example, say that the population of an area explodes, increasing the number of mouths to feed. In this scenario, more corn will be demanded even if the price remains the same, meaning that the curve itself shifts to the right.

According to my view, the demand curve for the Apple Video iPod will increase. According to the given paragraph iPod is thinner and lighter. The hardware and software ecosystem offers good content options and also portable. These are the main qualities expected by the customers. Henceforth customer wants to buy this product in the future also. If the price of the product increases in the future the demand for the product also increases because customers demand more products thinking of price increase in the future. At the same time if the price decreases in this case also customers will buy the product because they think that the good product is coming at a reasonable price. The demand curve for Apple Video iPod in the future may be like follows.

What is your opinion on a competitor product which has similar features to that of an i-pad or say it is better than i-pad and is offered at a comparatively cheaper price, how this will affect the i-pad demand curve and why?

bronzemule740

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

all nonprice determinants of demand are held constant.

only price is held constant.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

	a.	there is a movement along a given demand curve.
	b.	the demand curve shifts in the opposite direction.
	c.	the supply curve shifts in the opposite direction.
	d.	the demand curve shifts in the same direction.

ECON 1001 Lecture Notes - Lecture 13: Hyperbola, Inverse Relation, Demand Curve

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