经济学EconomicsforToday3E3.pptVIP

* If price changes When price changes, quantity demanded changes. There is a movement along the demand curve. * If non-price factors change This is known as a change in demand. That is, the demand curve shifts. Rightward shift indicates demand increasing. Non-price determinants of demand Changes in demand are brought about when the following non-price determinants of demand change: number of buyers in the market tastes and preferences income expectations of buyers prices of related goods. * Impact of changes in non-price determinants * * Summary: demand If ‘own’ price increases, there is a decrease in the quantity demanded – a leftward movement long the demand curve. If own price falls, there is an increase in the quantity demanded. A favourable change in a non-price factor causes an increase in demand – a rightward shift of the whole curve. An unfavourable change in a non-price factor causes a decrease in demand. * The law of supply There is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus. The supply schedule (table) shows the quantity of a good or service that firms are willing and able to offer for sale at different prices. The supply curve depicts the relationship between price and quantity supplied. * An individual seller’s supply curve for DVDs Note that the supply curve has a positive slope. * A positive relationship At a higher price, sellers will offer more units for sale, as it is more profitable for sellers to supply more at higher prices. * Individual supply curves Line up the price levels so Y-axis is the same scale. * Market supply Market supply is the horizontal summation of individual supply schedules in the market. * Changes in quantity supplied If the price changes, quantity supplied changes. This is a movement along the supply curve. * Changes in supply A change in non-price factors is known as a change in supply; i.e., the supply curve shi