The Market Forces of Supply and Demand：供给与需求的市场力量.pptVIP

The Market Forces of Supply and Demand 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. And Economics, especially Microeconomics is about how supply and demand interact in markets. Market Types or Structures Competitive Markets Products are the same,price takers Monopoly Monopolistic Competition Oligopoly Demand Curve Why does the Demand Curve Slope Downward? Law of Demand Inverse relationship between price and quantity. Law of Diminishing Marginal Utility. Utility is the extra satisfaction that one receives from consuming a product. Marginal means extra. Diminishing means decreasing. Market Demand 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. Ceteris Paribus Ceteris paribus is a Latin phrase that means all variables other than the ones being studied are assumed to be constant. Literally, ceteris paribus means “other things being equal.” Two Simple Rules for Movements vs. Shifts Rule One When an independent variable changes and that variable does not appear on the graph, the curve on the graph will shift. Rule Two When an independent variable does appear on the graph, the curve on the graph will not shift, instead a movement along the existing curve will occur. Let’s apply these rules to the following cases of supply and demand! 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 Quantity Demanded versus 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. Determinants of Demand Market price Consumer income Prices of related goo