THE DEMANO WIDE OF THE Manner Guacmrt PemMann (GAD DFFERENIT TWUsTEATION’ OF DEMAND Awe amount {Mot afert FOMManio MCHEOULE 99 ee viking yo bn come Period: Hd of Hine Gd Of certain geo ard woMad given a ek Of PHY ar arm “DEMAND ME QUNNNTY Daten Feed of ine z swititg to 5 “how muds Ot 8 wy ___Apaiting to ay, - aa oe + “aalcashnent) 0 » LAN OF DEMALD 5W a OKs Yat ANE ig oO Negorive 40 “0 sUationchip bekwcen quanti, AS $5 GeMaNd aNd CL, CHOAS GPS. 20 4 EXP UAN ATION, we o Fan incrcast of the grit world: mean Ane dtotas. of yO quanhhy PENMAN CARVE demand. a ee KORTE AOE a dota + Gragvical Wustation welvoen the GA ane io GA woUrd MLON gn increase Wn Pie in a given Grice of timc. ayant demand. ‘2 CRTERS PhUgus “Hering 1 Ned constant” = wie or Vieiting our _congumngtion on ke gia, TWO CONCEPT OF The NEGATIVE RELATIONS? ari ‘ 5B © 6 0 PV @) suesntunon etrect +find an alternative, groducr vl tre Od «g.= be (form in Wodel) __ woe Us out ponddering HE git ae our quantity emuand) WD \Noome errEct ee gh Hooks ak Hee git of Hee goods Ga zo-be. ae os ae ad earl and our income. a ad79. aa 30 gal torteSSS _SOPPLY Wioe OF The MnRKET Sura = tris ic tre final guod __ fads for Ring Banani cured 7 is Me amount OF goods and wewicer ellen Are wilting 40 Well at vome prriad. wurde. Guat wore +1 wont When will Oe the, 4p supe Aha avolalt, tet SI eulig TOL 1. HYPOTHETICR, CUPRA VoEDULE OF MEAT rlkg Gs(in tg 40 eo te wn 150 5 eo to 450 inocase DEMAND’ posltd- 100 Curr FaRcnon GQecrae eottane -m dronges Of price GWE changes Paratrtk—As©—40- Kegislakd minimum price (rice Viggo) that a prducer muck receive ‘for tre guecks they vell PRICE Celine *Kegislakd maximum price (Price Conto!) that tonvumers can pay Bra. P, Preduck Supe 7 Guaninry (suRpLus) Non PRICE PETERMINANTS OF DEMAND 4. Consumers weoue (‘/-) * NormaL Goods ~ PT 7D6) INFERIOR Goons - TI; 4 DC) 2. CONSUMER'S TACTE Ano PRETERENCE (1) | #47P; TDL) and vice verso | % ollons rend ver by cAifferent Seetos Such ag promotion ade etc. 5. CREDIT AVAILABILITY @TCA\*D and vice Vea G. PRICE OF RELATED 0005 ¥ Suigtitule goods ~ Pay 5 nDIt) + Complementary gucks - PPey /D(-) (Wores40 Ain PRICE DETERMIWANTS OF SUPPL 4. PRICE OF IMPurs (-) ere ys 2. TEtHNoLDGY (+) % Tteen 5 Tuice verca 3. NUMBEK OF PRopUceERS /FIRMs G? #7 no. produces 545 4. Tres & t tax 4S 3. MPORTATION GOUTA, ¥t1a,TS TH IAalus TPIB tS @. SuBsipies (+) * DSups 5S 9. PRODUCER'S EXPE CrATION(-) + Pept HS 3. Number OF BUYERS (1) + 1B 51D and vice eGa 1 4. CONSUMEK's EXPECTATION 4 TPY next period and PT Met period 5 | 4D current puriod (+ 3. 7 demand on the current time|peried ie dircety oF feck by (one) the vpeetan Trek earner period period ®, WEATKER CONDITION (-) sone on Ye future (price aan income) —(wilkoe,a a = 4.CHANGE IN GD vc. CHANGE IN OEMMID 11. CHANGE IN AD 1.2, CMANGE INOEMANO nen price, dclormincanly, - P if poa and ad movement, ceteris paribus 9. CHANGE WAS yc. CHANGE INsuPPLY 2.1. CHANGE IN BS 2.2, CHANGE IN UPA < t TS ward night, Lf celeric pavibuy 1 Q > Gr505 f ee ver, tSDato: __ What will happen to the PF and GF given the follovling wecenarid + _ ¥55B (chortage) 47055 2. BENE Se gas EXAMPLE | what will happen to the PF and @* of milktea_ if: nine Supply a. The Price of [milk] falls. WPL TS downward right QF y OF ae Preence @ tack b. The Pople will become hheal¥h concious cand Congumes [es calories, P s VIP 54D downward left a eS ee ee aDate: —____— fre marker ia —ELASncimt - measures the responsiveness of quantities i respond fe the changes in the variables affecting te 24 buantity a @ Pe po Ent SF ee a % Bin variavia, ac. a _Tessormasniy _1 INELASTIC - 2O@L 2am varices 4. PERFECT INELASTIC- 2 OQ Pemains Constant at amy fevel 2. ELaslury -%6Q 72D in variables of the vanable afftchag 6. 3 UNIT ELastic ~ b SQ = % D in variables 5. PERFECELY ELASTIC - infinitely large chamge in Q in tecpone +0 @ very mall change in the 4. INELASTIC (not reg ponsive) vanable affecting i}, e poatte +f €2|1| d, PERFECRA INEVAcTic (0 Cescong) p- bison & OK OF Exrreme Casts) PS] = Ussalld hageens wind ~T ORT HSS tess-responst 1 uonxity Z. drastic Cregponsive) G0 . ori 5. PERFECT EVAGTIC ° Cpe SS ot in quantiry are onvask lt >. UNIT ELAsIC GNIDate: —___ EVASTOTH CONCEPTS AND MEASUREMENTS 4 WATHEMAT CAL TORNULAS A. ARG BLAGHOAM = measures Ae clastidh lbctween AWo (2) veparate points on the demand | cupplt cure. GeO | ie B, POINT ELASMOTA - meagures Ane dasticity ak oft point on Ane demand ond suppl cnr. Ne INTRE DEMAND «\OE* 4 Fe £09. form e (bel a Uae to? eae = INTHE SuePLd SIDE: ¥ DeS Face at? te ar 8 2 bee zee Br=@s fa-Py Exemergs + . eo es wucrent pict P= 50 rae P=DW Qi=20 serena? Pi: Gay to Ag 30 4 = tw a hae aw Qa=\P-2P € =a. é 2 \S0-2 (90) G eat o's Elastic responsive Qa: jo zy ees Price , there is a positive Go- exeatiog) response to4 2. CElostic ¢7\Al)USE 4. Suppose tre Demand _ fer Pameio is given X= 200 -2.5P4 0.901 -0.2Py Proviem. The cameat pect of Pomclo is Frslkg. However, he Prdces are Planning 40 ncreax Is price *» Flolkg Ap inctast Pee a “Miswees | ourDNs U.slog Yr. ane Qacichty, Fue “ae a a) Given 7-55 |g sere Qa- 1 Cet at so warobese Fe aslo Bae wWo-PAS — = -25+0.95 perees Getta -. Slasric ~_a\ trot is ‘te price, t daciaty S7 bb.) Givens T= 200 GA =, > demand (Ue) of cuerent pie ae 2004 0.404 ae % eve 2 gaz 200 spades) /(F P20 ze Qa: 200460 os \o2 1) 4 te concumnet income is 200 Ga 200 c-laelastic, _wnak ‘ic “tne jpoome dhastioty and. Normal Good. ArkO what {yee of good is Fomlo _ ARC ELASTICITY EXAMPLE + ie Using Ye demand Schedule -or_Nokbok. Lek us comput the demand elasticity for alt noitdecok using Point ekacticihy and Arc ¢lacticity fom pitts Ate F and £ PA T. Point A to FE: Givens P= A Aes 35 QV.120, Oe: 45 Four PRICE ps pee Unit _OD per week Poy &: at Be & ae “2 _® ta iso ra. 8 ie 2 ay ete = % ee oe —e ¢ “AE atte c 6 * @: -logal D 20 __ 7 i Floste leash ms os Mielec“MEDIeA OF CONSUMES BEHAYO” UNLITH-Y-? amount of Gatisfaction” “Sotepuye OF PTAL ond MAKeINAL UMLITY" of giastes derived fon dae consumphon of + Sater u su ° = Commodity. 0 I 20 10 UNL ume of Measurement for vatis- 2 21 1 Fockion 5 32 q a 3 “9 MEAGUICE MENT OF UNLICY ” S 2S. 0» 1 CARDINAL UTILITY Geuons, wWalrac , Maccied) & Ral =! > assigning numbers fo measure utility TUM oF ee 2. ORDINAL UNITY -¥ ranking Laccoveling +0 “the ordtr oF preference. “TOTAL UNuUTY ArpRoACH) sta unury (Tu) = tht overall bevel OF catisfaction ~dtal kevel of vatisfachion *MARSINAL UnLTY (Mu) = the additional wutisfaction on ladividual Aevives from concuming addition Commodi ty G6 HaSle +t G a ( Mo low of deminishin. Margiral unity ED) IND\FFEREN CE Curve Cic) = locas points egon Point represents Combination Of goods from which Consumer derives Ame came Ket of ubiity.. All_combinaition qive the came wel of sans factionFre farther, the higher fie Revel of Mticfaction. 3 TAPES OF ASSUMPTIONS of CONSUMER'S BEKAVOK HE, OF CHES 7 + CONNPLETENESS ~Kaoting wnat agi nO Ie Tingidelve —_- Chong ok eS TRANS ITIVITY Zenon Otol Maeacrers OF T.c $. Downward Soping + Non SAATON se Oe wana g. Convex to Angia Tndifgorence 4 Ake ONE aod - S. Non Inkvsect ing Marginal Pemistishing Return INDITFRKENCE war +O Fferent when it comes to budogr 5 a BMOSET CONGTREINT 77 _& Get of Collection of indifference Gunes which represents varios levels Of orisfaction oF utility. G00 SPB CET LINE. i ipseagheth ag Geox Te Rut yy Bo = Rw) + (od EReMPur ¢ Comenanon a CONBINA TO & Ciomai vice Fries Gunde ComsinATiOn) Boa Are BXB = indifferent Nore” The nearer the 1c iM the point oF origin tre (eccer Hie fewel of gatis factionDato CONcUMER's EGUILIBRIUM = moximiration W that can bt derived from Ane consumption of Awe _2 gvods with regards 40 available udget. M. Muy 4 equi- marginal Pe Pa J Print Subject 49 BMOGET concrRainy » TERK 4 4 BUDGET LINE = ig We lows OF goinks, Code pO’ fepresenting Combpinations of dnt Mayimum Amounts of goods ANd aervicns Anoka consumer can putdnage giver Line level oF income and pricts Of Ane Commoditi¢s . ‘Slope of Budget -% Given Kine Income = 45 EXDMIPLE > (Fichloall and Godt Px (urge)? 5 | re | Mure | SE | ts | us| MEE ey Py loftdvis) = 10 1.27) bs - jso|-|- yr 2/| 24 | 4 | 45 | 105 | 55 | 55 x7? 3| as | © |@ [wel [as 4| 50 | 5 | 25 [ns|%/@ S| | 4 | @ [8] 21 @© &| oe 2 4 11d] Io [1S Where Fre + Zpesss|ctick of fighter Pe = (Opesos serving of sibmai treladgur lint Puaget » PO ‘ie mate “Riek a OR Guestion’ wnat combination of FE and S can Worichy Me Consumer? ’ yor Tht combinatiin B Php. uo Combination A at SL*% —_Comvinatimn B ot Si = 7 with 5 cricke OF fsbball Fo: 3 rq Pero OS and 5 servi u sing et gy tanta to a + 104) oa io Can ovbishy H% congue,Date: —____— = + Tevet oF pRopUcnON LAW OF DENUNISHING ReTARNS Wares Hak as the use of input increase! wit _PROucHION FaRCnON evo, OtMer igput fd), 0 goiat_wii_Aventually be reached ___AK_vinicn Roe Veurting, additions 40 dakpuy betwen toe input of fesourets of a deutasts fat bo Alem ang Anci¢ outputs of goad and _easwemgsion Eo CEWiee OF a given period of Aime. Aveeace propuct (AP) — prow Ap TR Be. £ au oO HOF ourguts, > wropivat Framece «Te, me, AP Gear? TPE oF eure wece tp me ape ee) O- FIXew Inpurs -? non-changeautt, ° 0 zi es lo. VARWOLE INPUTS © enangeavit 4 2 2 ty 2 A > | ce Employment ‘Wwe _FeamEe oF Peooucnen Seine) 3 mv 4 e aa, a. Swot“ Ne on 4 faede sl J 1b Long “nin St tak rents fee mony wor 3 20 u 54. Xe tettial good kt Ld 4 ro AgsuMeTION = Ont - variawne, q n 1 4s (7 : Ga ws oe ad TOTAL Ropu Li?) 4 v 2 aR } trace refs 40 AN tkal_apognt_of output fo aw 4 zo) Produced iM guysical units: Maeinay PRoouct (MP) STACE OF PRODUCHON agrotit -v Wt fate OF change ia output ac an G. UTEE T = Ineeacing Returns _idput i¢ Changed py one unit, Otkeds parituc- ~ Ane increase in qutput are More fran, propor we= £2 Aioral_to toe ineteace ip Vowiabk input. At ot Anis tage TP ipeteacing ok _on_incregsing Tequicit fare , Ye WP and AP ic aiso jncreasin CoradbrsDato: —__ b. CTAGE = Decetasing Retuens tr, AP 4 Ac 0 firm uses moe of Ne Voriable yy Taguic, de additional prawer aeuines. ~ TP is will ifig but_ay_accreag [ 28 il stant tot Sent yore wali ik reaches He Maximum, “OAM _ 4 Pew deaining uawl it becomes 0. te C- WTACE w= Negative Problems 0 TP ctaris 40 decting MP vecomes negative ew oAP ie Atertacing Bouwonet Pounovy 0 \ AR ig ak Maximum ETP je at Maximum 1. ae = MP a-me- 0 4 ascume non 1. Price Jobo 2. POAT maximirers aad _C&t_micimiree a.\nguts Oe dubs titute 4 Outputs ace identical goods