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1. Demand
- Demand
- Goods
- Inferior goods: as income
rises demand falls
- Normal goods: as income
rises so does demand
- Inferior goods: as income
rises demand falls
- Market demand curve
- Equilibrium
price
- Price X Quantity
demanded per
period of time
- Changes in demand lead to shift in the demand curve
- Left shift is a decrease in demand
- E.g. decrease in income would
lead to a decrease in demand
of the product when a the
same price. As they cant afford
to pay the new price for their
original demand
- E.g. decrease in income would
lead to a decrease in demand
of the product when a the
same price. As they cant afford
to pay the new price for their
original demand
- Right shift is an increase in demand
- E.g. rise in income
would lead to an
increase in demand of
the product at the
same price
- E.g. rise in income
would lead to an
increase in demand of
the product at the
same price
- A determinant of demand, other
than the good's price, that fixes the
position of the demand curve.
- E.g. income, tastes,
price of substitute
goods and price of
corresponding goods.
- E.g. income, tastes,
price of substitute
goods and price of
corresponding goods.
- Left shift is a decrease in demand
- Price change leads to movement
along the demand curve
- Price change leads to
change in demand of the
quantity of the product
- Extention in
demand
- Contraction in
demand
- Extention in
demand
- Price change leads to
change in demand of the
quantity of the product
- Ceteris Paribus assumption is
always made when sketching
this model
- Equilibrium
price
- Goods
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