ECON-1010 Chapter Notes -Ceteris Paribus, Inverse Demand Function, Demand Curve

• School: Vanderbilt University
• Department: Economics
• Course: ECON-1010
• Professor: Hojjatallah Ghandi

Document Summary

Quantity demanded: the quantity of a good or service that consumers want to buy over a speci ed period of time at a speci c price. Movement along the demand curve = change in quantity demanded. Demand: the number that buyers will buy at each price, assuming everything else remains constant. Includes all of the quantity demanded at each price. Demand curve: a graph illustrating how much of a given product a household would buy at different prices. [inverse demand function graph on notes p. 8] Demand is always continuous (the curve stays the same, but the quantity demanded changes) Law of demand: ceteris-paribus if price increases, the quantity people buy decreases; if price decreases, the quantity people buy increases. Primary reason for this is that substitutes exist for many goods and services. Another reason is that our income doesn"t change. Tastes/preferences change over time affects what consumers buy.