Alfred Marshall Reasons why Prices reduce the Qd

responsible for the development of

microeconomics in the modern times
developed & popularized the use of
supply & demand curves through a
graphical analysis in determining the
market price & quantity of a particular
good.
Consumption
responsible for the development of
mspending of individuals on goods and
services
Substitution Effect
a situation wherein the price increase of
a good leads to an increase in the
consumption of another good
Income Effect
change in the quantity demanded of a
good due to a change in the consumer’s
purchasing power, which can be
brought about by price changes or
change in income.

Production
creation of goods and services called
Microeconomics

outputs. (products)

Marketplace
is defined as a venue where people
meet to conduct transactions like
buying and selling

Market
is a mechanism that facilitates the
overall transactions between buyers
and sellers to determine prices and
quantities in a market-driven economy

1. Goods market
market for outputs, whether goods or
services.

2. Labor market (factor market)

human physical effort is bought and
sold.

3.Financial market (money market)

people basically purchase or sell
financial assets

Normal good
a good whose demand increase as
income increases.

Inferior good
good whose demand decreases as
income increases