Supply and Demand (Valentine's Edition)
Supply and Demand (Valentine's Edition) Econ 103
Popular in Principles of Economics: Microeconomics
Popular in Economcs
This 5 page Class Notes was uploaded by Dasmine Ferrer on Saturday February 13, 2016. The Class Notes belongs to Econ 103 at Pace University taught by Anna Shostya in Winter 2016. Since its upload, it has received 47 views. For similar materials see Principles of Economics: Microeconomics in Economcs at Pace University.
Reviews for Supply and Demand (Valentine's Edition)
These are great! I definitely recommend anyone to follow this notetaker
-Dr. Pink Hessel
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 02/13/16
2/13/15 Principles of Micro-Economics Notes: Supply and Demand (Valentines Edition) Demand The Law of Demand: as price increases, quantity demand falls. LIKEWISE, as price decreases, quantity demand increases. (With Ceteris Paribus: all other variables held constant) Quantity Demand: total amount of goods and services that are demanded and is determined at any given point along the demand curve. (Price v. Quantity graph) Example 1: During Valentines Weekend, prices in plane tickets increase because of all the long distance couples want to see each other. Therefore, single people who just want to travel or go on vacation, are more likely to choose the less expensive route like driving or staying home with Netflix. The quantity of plane tickets that you demand decreases to zero because the price has increased. Example 2: When Valentines Day chocolates go on sale on Feb. 15 , the quantity that you demand increases because the price has fallen. Market Demand: 1. Horizontal Summation 2. How much people are willing and able to buy at any price 3. Negative relationship between price and quantity Normal Goods: When a person’s income increases, demand increases OR when income decreases, demand decreases. (more expensive goods) Example: When your boyfriend gets put into the manager position and his income increases, he sends you an Edible Arrangement instead of flowers at the grocery store. Example: When your boyfriend gets fired and his income decreases, therefore he takes you to McDonalds, instead of New York’s Best Restaurants. Inferior Goods: When a persons income increases, demand decreases OR when income decreases, demand increases. (“Trading Up” and/or cheaper goods) Example: When your boyfriend gets fired and his income is decreased, you have to meet him on the subway because he can’t afford to pick you up in his car anymore. Example: When your boyfriend gets a raise, and he doesn’t buy you the same microwavable pizza. Shifts in Demand: o Income o Taste and preference o Population o Expectation o P of substitutes and complements Supply Law of Supply: as price increases, quantity supply increases, LIKEWISE, as price decreases, quantity supply decreases. (With Ceteris Paribus: all other variables held constant) o Example: On the 14 days before Valentines Day, the price in stuffed animals increases, therefore suppliers increase the supply of stuffed animals. o Example: When Valentines Day is over, the price in Valentines Day junk decreases, therefore suppliers decrease the supply and wait again for next year. Quantity of supply: (move along the curve) change in price. Shifts in Supply: 1. Technology (ALWAYS shifts supply to the RIGHT) 2. Weather/agriculture 3. Wars/natural disasters (ALWAYS shifts LEFT) 4. Price of factors of production Supply and Demand Cases and Examples of Graphs
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'