ECON 1051 1st Edition Lecture 8 Outline of Last Lecture I. Terms II. Law of Demand III. Chicken Wings and the Super Bowl IV. Variables that Shift Market DemandV. Supply VI. Market Equilibrium Outline of Current Lecture I. Things To Know About DemandII. Law of Demand III. Variables that Change Market Demand Current LectureI. Things To Know About Demand a. Demand Schedule i. Shows quantity demandii. Depicts what consumers are willing to pay and spend on goods. Shows the relationship between price and the quantity of the product demandedb. Quantity Demandi. The amount of a good or service that a consumer is willing and able to purchase at a given pricec. Demand Curvei. A curve that shows the relationship between the price of a product and the quantity demanded II. Law of Demanda. Definitioni. Negative relationship between price and quantity demanded1. If one goes up the other goes downb. What explains the laws of demandThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.i. Substitution Effect1. The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relativeto other goods that act as substitutes ii. Income Effect 1. The change in the quantity demanded of a good that results from the effect of the change in priceIII. Variables That Change Market Demanda. Income i. Normal Good1. A good for which the demand increases as income rises and vice versaii. Inferior Good 1. A good for which the demand increases as income falls and vice versab. Prices of related goodsi. Substitutes1. Example:a. Pepsi and Cokei. If the price of one increases the demand for the other one increasesii. Complements 1. Example:a. Hot dog and hot dog bunsc. Population and Demographicsi. Demographics1. The characteristics of a population with respect to age, race and gender d. Tastesi. Subjective elements such as ad campaigns or trendsii. Can enter into a consumer’s decision to buy a product e. Expected future pricesi. Consumers choose not only which products to buy but also when to buy them1. Example:a. If the price of stock is expected to go up next week, then demand increases
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