北京理工大学2008年攻读博士学位研究生入学考试试题_部分2.pdfVIP

~t :f. w. :I.J:.. f . 2008 ~lii.±~iiiif~~A~iiti:itH #Ii-Rjjq: 1001 #Ii~#: ~ift ~The substitution effect reflects the consumers desire to get the best buy. ~rdingly, if the price of product A iBcreases, the individual will tend to , ~tuie another product ~d purchase less of goods A. The negative correlation be\ween price and quantity demanded is also explained by the lawof diminishing marginal utility. AccordiDgto this law, the additional utility the consumer gains from consuming a product decreases as successively more units of the product are consumed. Because the additional units yield less utility or satisfaction, the consumer is willing to purchase more only ifthe price ofthe prOduct decreases. Economists distinguish between individual and market demand. As the term implies, individual demand concerns the individual consumer and illustrate the quantities that individuals demand at different prices. Market demand includes the demand of all individuals, for a particular goods and is found by summing the . quantities demanded by all individuals at the various prices. The other side of the price system is supply. As in the case ofdemand, supply is a relationship between a series ofprices and the associated quantities supplied. It is assumed that as price increases the individual or firm will supply greater quantities of a product. There is a positive correlation between quantity supplied and product price. Economists also distinguish between a change in sl!pply and quantity supplied. The diStinction inimilar to the one made with respect to,deJnand. Also, as in the case of deman4, economists distinguish between individual firm supply and market supply, which is the snmmatioq of individ