ECON 2310 Study Guide - Final Guide: Profit Maximization, Isoquant, Giffen Good
11 Oct 2012
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Demand curve shows how much buyers of the product want to buy at each possible price, holding fixd all other factors that affect demand. Factors that affect the demand for a product include population growth consumer tastes, incomes, the price of other products and government taxes or regulations. A change in any of these factors will cause the entire demand curve to shift. A change in price results in a shift along the demand curve. Substitutes two products that if all else is equal, an increase in the price of one of the products cases buyers to demand more of the other product (eg potatoes and corn) Complements two products that if all else is equal, an increase in the price of one of the products causes consumers to demand less of the other product. (eg butter and corn) Demand function describes the amount of the product that is demanded for each possible comination of its price and other factors.
