EC270 Chapter Notes - Chapter 2: Marginal Revenue, Negative Number, Dependent And Independent Variables

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12 Oct 2012
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Market demand schedule table showing the total quantity of the good purchased at each price. Market demand curve the plot of the market demand schedule on a graph. The vertical axis of the graph measures the price per unit of the good. The horizontal axis measures the quantity of the good demanded per unit of time. Good managers learn to understand the nature of demand for products and effectively manage it. Many other factors besides price affect consumer demand some of these are controlled by managers, such as advertising, product quality, and distribution. Other factors, like the number of substitute goods, the prices of rival products, and the advertising of rivals are part of the competitive dynamics of the product space. Knowing the sensitivity of demand to changes in environmental factors lets a manager effectively respond to these changes. The sensitivity of one factor to another is called elasticity.

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