Lecture 5 Outline of Last Lecture I. Macro GoalsII. Supply and DemandIII. Non-price determinants Outline of Current Lecture I. Non- price determinants (continued)Current Lecture- Competing/ Substitute goods (ex. Coke and pepsi) Price for one goes up; demand for the other goes up.- Expectations Assumptions or expectations of an increase or decrease in the price affect the demand of the good- Number of buyers A competition between individual demand vs market demand Non – price determinants of supply- Price of inputs Inverse relationship - Technology - Regulations Inverse relationship - Subsidies: Government pays the producers for their product The source of this money is the tax payers - Prices of other goods - Expectations - Number of sellers - Taxes If you want to decrease usage of a product, you simply tax it. - 2 main questions that help form the non-price determinants: ECON 2305 What is the market? Is there a parameter which impacts supply or
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