*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 1:
Fundamentals of Demand
*Chapter 3 Section 2:
Shifts in Demand
*Chapter 3 Section 2:
Shifts in Demand
* Income
* Consumer expectations
* Demographics
* Consumer taste
* Advertising
*Chapter 3 Section 2:
Shifts in Demand
*Income:
*Normal goods- goods that consumers
*Chapter 3 Section 2:
Shifts in Demand
* Consumer expectations:
* Demographics
*Chapter 3 Section 2:
Shifts in Demand
* Population:
*Chapter 3 Section 2:
Shifts in Demand
used together
* Substitutes: goods that are used in place of one
another
*Chapter 3 Section 2:
Shifts in Demand
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 3:
Elasticity of Demand
*Relative importance
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 3:
Elasticity of Demand
* Price
* Quantity sold
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 3:
Elasticity of Demand
*Chapter 3 Section 4
Fundamentals of Supply
company or owner
*Whoever supplies a product to market
*Price increase is also an incentive for new
firms to enter the market to earn their own
profits
*Individual firms and firms changing their
level of production and firms entering or
exiting the market- combine to create the
law of supply
*Chapter 3 Section 4
Fundamentals of Supply
*Chapter 3 Section 4
Fundamentals of Supply
* 2 variables
*Chapter 3 Section 4
Fundamentals of Supply
*Chapter 3 Section 4
Fundamentals of Supply
supply schedule
*Elasticity of supply- measures how firms
will respond to changes in the price of a
good or service
*Elasticity is greater than 1- supply is very
sensitive to price change
*Elasticity less than 1= supply is inelasticnot very sensitive to price change
*Elasticity = to 1 unitary elastic
*Chapter 3 Section 4
Fundamentals of Supply
*Chapter 3 Section 4
Fundamentals of Supply
*Chapter 3 Section 5
Costs of Production
*Chapter 3 Section 5
Costs of Production
* Cost of a building
* Property taxes
* Etc.
*Chapter 3 Section 5
Costs of Production
* Labor
* Materials
* Electricity
* Etc
*Chapter 3 Section 5
Costs of Production
marginal costs
* Any other quantity will generate less profit
*Chapter 3 Section 5
Costs of Production
*Chapter 3 Section 5
Costs of Production