EC120 Chapter 4: EC120 - CHAPTER 4
30
EC120 Full Course Notes
Verified Note
30 documents
Document Summary
Chapter 4 the market forces of supply and demand. Wheat farmers: monopoly: a market with only one seller, and this seller sets the price. Demand curve: quanitity demanded: the amount of a good that buyers are willing and able to purchase. If something happens to alter the quantity demanded at any given price, the demand curve shifts. If the canadian medical association discovered that people who regularly eat ice cream, live longer and healthier lives, demand would go up. 5 factors that cause shifts in demand curves: income: a lower income means that you have less to spend, and vice versa, normal good: an increase in income leads to an increase in demand. (e. g. Ice cream: inferior good: an increase in income leads to a decrease in demand. (e. g. If you expect to earn a higher income next month, you will spend more right now: number of buyers: how many people are purchasing the product.
