ECON 162 9 28 15 Equilibrium A situation that will tend to persist over time Demand Curve A model that shows the quantity of output that consumers are willing and able to purchase in a market at different prices ceteris paribus Determinants of Demand 1 Price of good X Px 2 Prices of substitutes and complements Py 3 4 Tastes and expectations T 5 Population PoP Income I Demand Equation Q X F Px Py I T PoP D Is a Function Of Quantity Demanded of Some Good X Change 1 Results from a change in Px only 2 Movement along a given demand curve Change in Demand 1 Results from change in Py I T or PoP 2 Shift of entire demand curve An Increase in Demand May Be Caused By 1 An increase in the price of a substitute 2 A decrease in the price of a complement 3 An increase in income if the good is normal 4 A decrease in income if the good is inferior 5 An increase in taste 6 An increase in population X X is Held Constant in Quantity Demanded
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