EC 201 Chapter Notes - Chapter 3: Normal Good, Inferior Good, Demand Curve
Document Summary
A market is an organized exchange of a good or service between buyers and sellers. Demand refers to the behavior of buyers in a market. The law of demand states that when there is an increase in the price of a good or service, the quantity demanded will decrease, all else equal. Similarly, the law of demand states that a decrease in price is associated with an increase in quantity demanded, all else equal. A demand schedule is a table that shows the combinations of a price and quantity demanded. A demand curve is a graph of the combinations of price and quantity demanded. Thus a demand schedule and a demand curve show the same information; the only difference is that the demand schedule is a table, while the demand curve is a graph. A demand curve is constructed by allowing the price of a good to change, while holding everything else constant.
