ECON 219 Chapter Notes - Chapter 3: Inferior Good, Economic Equilibrium, Perfect Competition

• School: McGill University
• Department: Economics
• Course: ECON 219
• Professor: Christopher Ragan

Document Summary

Econ 219 chapter 3: the demand and supply model is not always the right way to think about price and quantity ex: ipods, coke*, diamond rings**, doctors/lawyers/engeneers. Carrots, wheat, oil, gasoline, copper, wire, steel, aluminium, beef, porc, Canada 2011 carrots : how much do the consumers want to buy in that year? quantity demand. Actual purchase : what ends up actually being purchased flow as opposed to a stock ceteris paribus : all other things being equal price of product and quantity demand are negatively related. Why? there are usually several different products that can substitute any given want or desire. Influences on demand: income, tastes, age distribution, population, price of alternatives, Average household income, prices of other products, distribution of income or population, expectations about the future. Quantity supplied and price as the price goes up, the quantity supplied also goes up --> if the price rises then the production and sale is more profitable.