Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
th
ECONOMICS 11 Edition
By
Mark Hirschey
Demand and Supply
Chapter 3
Chapter 3
OVERVIEW
Basis for Demand
Market Demand Function
Demand Curve
Basis For Supply
Market Supply Function
Supply Curve
Market Equilibrium
Chapter 3
KEY CONCEPTS
demand supply function
direct demand supply curve
change in the quantity
utility supplied
derived demand shift in supply
demand function equilibrium
demand curve market equilibrium price
surplus
change in the quantity shortage
demanded comparative statics
shift in demand analysis
Supply
Basis for Demand
Direct Demand
Demand is the quantity customers are willing
to buy under current market conditions.
Direct demand is demand for consumption.
Derived Demand
Derived demand is input demand.
Firms demand inputs that can be profitably
employed.
Market Demand Function
Determinants of Demand
Demand is determined by price, prices of
other goods, income, and so on.
Industry Demand Versus Firm Demand
Industry demand is subject to general
economic conditions.
Firm demand is determined by economic
conditions and competition.
Demand Curve
Demand Curve Determination
The price-quantity demanded relation.
All non-price variables are held constant.
Relation Between the Demand
Curve and Demand Function
Move along demand curve when price
changes.
Shift to another demand curve when non-
price variables change.
Basis For Supply
How Output Prices Affect Supply
Firms offer supply to make profits.
Higherprices boost the quantity supplied.
Lower prices cut the quantity supplied.
MR < 0 if │εP│< 1.
Price Elasticity and Optimal
Pricing Policy
Optimal Price Formula
MR and εP are directly related.
MR = P/[1+(1/ εP)].