ECON 1P91 Chapter Notes - Chapter 4: Demand Curve, Hot Tub, Independent Goods

• School: Brock University
• Department: Economics
• Course: ECON 1P91
• Professor: Professor Cottrel

Document Summary

If surplus or shortage exists, market forces always ensures system moves to equilibrium. At , q^d = 16; q^s = 10. Q^d - q^s = 6 [excess demand] Q^s - q^d = 16. 5 [excess supply] When shifting both curves, nal outcome is dependent on: **the change on one of the axes will be ambiguous. Refer to diagram 5 (non-responsive) and 6 (responsive) (non-responsive) - inelastic - nd < 1. (responsive) - elastic - nd > 1. Slope = delta p / delta q. Elasticities change along demand curve | straight line demand curve has constant slope. Refer to diagrams 9(perfectly elastic demand nd = inf) and 10 (perfectly inelastic. % delta formula with a weighted base: ((new - old)/average)*100. The elasticity of demand of white teddy bears. Nd = (((4-3) / ((4+3) / 2)) * 100) / (((5-6) / ((5+6) / 2) * 100) In the elastic region, when the price decreases [p(down)], total revenue [tr(up)]