Saturday, April 5, 2014

Economics: Demand, Supply, and Market Equilibrium

Chapter 3- Theoretical approach to market equilibrium
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market- place where you have a buyer and seller together
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Demand Curve: relationship between price and corresponding quantity









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bidding prices- when you have money you can boost up the price but it doesn't have
a positive effect on every one else
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consumer expectation- what do you anticipate about the availability and price of
product
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hedge buying- wont be here in a while so you buy more in anticipation expect
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Supply- producer actions
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costs- to increase move to right and to decrease go to left of the original
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changes in resource will affect the demand curve shape
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if resource prices go up, that increases cost, thus restricting availability
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technology will allow you to surpass expectations
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taxes and subsidies - tax takes away because it adds to cost, subsidies aid you in
some way or form
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producer expectation- what to make available or restrict of something in the future
1
Consumer Actions:
based on having an
income
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Why we have demand?
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common sense- if something is higher in
price you demand less, lower demand
more
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substitution effect- at a lower price you
will demand more of something than
you would at a higher price, in place of
it
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diminishing marginal utility- declining
extra satisfaction
TEST ON THIS: SATURDAY APRIL 26