ECON 101 Lecture Notes - Lecture 3: Kraft Dinner, Demand Curve, Economic Equilibrium
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Lecture 3: where prices come from - the interaction of supply and. Note: ceteris paribus (all else equal) - when analyzing the relationship between two variables, all other variables must be held constant: variables that shift market demand: Income ; price of related goods ; tastes ; population and demographics ; Tuesday, september 27, 2016: effect of change in price of a related good on demand, substitutes - a good that can be used in place of another good. A fall in the price of a substitute decreases the demand for the good. E. g. pepsi vs. coke ; chocolate vs. ice cream: complements - a good that is used in conjunction with another good. A fall in the price of a complement increases the demand for the good. Price of inputs ; technological change ; prices of substitutes in production. ; number of firms in the market ; expected future prices ( all non-price.