ECO101H1 Chapter Notes - Chapter 3: Demand Curve, Inferior Good, Normal Good
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ECO101H1 Full Course Notes
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Competitive market: many buyers and sellers that influence the price a good or service is sold. Supply and demand model: model of how competitive market behaves. Law of demand: higher price leads to a lower quantity demanded. Shift of curve = change in supply or demand. Movement along the curve = change in quantity based on change in price. Change in prices of related goods and services. Substitutes: 2 goods are substitutes if an increase in price of one results in an increased demand for the other. Complement: goods that go together, an increased price for one will decrease the demand for the other. Normal good: when rise in income increases demand for it. Inferior good: when rise in income decreased demand for it. Change in expectations (changes in expectations of future price) Individual demand curve: demand curve for a particular individual. Market demand curve: combined curve for all consumers.