经济学原理四课件.pptVIP

The Market Forces of Supply and Demand Chapter 4 Topics Demand and determinants Supply and determinants Equilibrium Markets A market is a group of buyers and sellers of a particular good or service. The terms supply and demand refer to the behavior of people . . . as they interact with one another in markets. Markets Buyers determine demand. Market types: Perfect competition Monopoly Oligopoly Monopolistic competition Three hypotheses of economics 1. Rational man (economic man) 2. Perfect competition 3. Perfect information Demand Quantity demanded is the amount of a good that buyers are willing and able to purchase. Law of Demand The law of demand states that there is an inverse relationship between price and quantity demanded. Demand Schedule The demand schedule is a table that shows the relationship between the price of the good and the quantity demanded. Demand Curve The demand curve is the downward-sloping line relating price to quantity demanded. Demand Curve (Catherine’s) Market Demand (P67) Market demand refers to the sum of all individual demands for a particular good or service. Graphically, individual demand curves are summed horizontally to obtain the market demand curve. Determinants of Demand Market price Consumer income Prices of related goods Tastes Expectations Number of buyers Change in Quantity Demanded versus Change in Demand Change in Quantity Demanded Movement along the demand curve. Caused by a change in the price of the product. Changes in Quantity Demanded Change in Demand Change in Demand A shift in the demand curve, either to the left or right. Caused by a change in a determinant other than the price. Changes in Demand Variables that can shift the demand curve: Consumer Income As income increases the demand for a normal good will increase. As income increases the demand for an inferior good will decrease. Consumer IncomeNormal Good Consumer IncomeInferior Good Prices of Related GoodsSubstitutes Complements W