ECON 211 Lecture Notes - Lecture 7: Marginal Utility, Demand Curve
Document Summary
Price, income, price of other goods, tastes, expectations of future income/price. Law of demand: as the price of a good, service or resource rises the quantity demanded will fall. Demand curves are always going to be downward sloping. Diminishing marginal utility (satisfaction): as people consume more of a good during a fixed time period, the satisfaction received from each additional unit falls. Income effect: lower prices= higher purchasing power of income. Substitution effect: when the price of a good becomes higher, consumers are more likely to search for a substitute. Change in price results in a shift along the demand curve. Any time there"s a change in the price of a good it causes movement along the demand curve. A change in any other factor that influences consumers causes a shift in the demand curve. (moves up and down. ) When more people in the market are willing to buy.
