Chapter 2: Demand, Supply & Market Equilibrium
2-1. Demand:
Demand is the quantity of a good that consumers are not only willing to purchase, but also have the capacity to buy at the given price per unit of time. For example, a consumer may be willing to purchase 2 kg of potatoes if the price is $0.75 per kg. but, the same consumer may be willing to purchase only 1 kg if the price is $1.00 per kg.
2-2. demand schedule
A demand schedule can be built that shows the quantity demanded at each given price.
demand schedule
price quantity
6 2
5 3
4 4
3 5
It can be represented on a graph as a line or curve by drawing the quantity demanded at each price. It can also be described mathematically by a demand equation.
2-3. Demand curve
The general form of a demand curve is that it is downward sloping. because that negative relationship between price of goods and there quantities.
2-4. Special cases of a demand curve
The demand curve for most, if not all, goods fits to this principle. There may be unusual examples of goods that have upward sloping demand curves. A good whose demand curve has an upward slope is known as a Giffen good.
2-5. Aggregate demand
• Aggregate demand is the total demand for final goods and services in the economy (Y) during a specific time period.
• An aggregate demand curve is the sum of individual demand curves for different sectors of the economy.
• The aggregate demand equation has five main parts:
where
C: is consumption,
I: is Investment,
G: is Government spending,
NX: is Net export,
X: is total exports, and
M: is total imports.
2-6. caused of change in demand:
A change in demand for a product can be caused by many factors. Below are a few of the most common.
• Population Changes – An increase in population increases the demand for food and other products, shifting the curve to the right.
• Demographic Changes – The ageing population in any country will affect the demand of many products. For example, the demand for health care will increase, shifting the curve to the right.
• Tastes and Preferences – In recent years, health concerns have had a major effect on the preference for various types of food products.
• Rising Incomes – Increasing income levels in developing countries increases the demand for food, shifting the demand curve to the right.
• Income Distribution – The rising income disparity in the U.S. has increased the demand for high value/expensive products by high income consumers while having little effect on the product demands of middle income consumers.
• Substitute Products – Because beef, lamb and poultry are all meat products, what happens in one product affects the others. A disease problem in the poultry product that reduces the supply of poultry will shift the demand curves for beef and lamb to the right.
2-7. Supply
Supply is the quantity that producers are willing to sell at a given price. For example, the potato grower may be willing to sell 1 million kg of potatoes if the price is $0.75 per kg and basically more if the market price is $0.90 per kg. The main determinants of supply will be the market price of the good and the cost of producing it.
The general form of a supply curve is upward sloping, because of the positive relationship between price of goods and there quantities.
المادة المعروضة اعلاه هي مدخل الى المحاضرة المرفوعة بواسطة استاذ(ة) المادة . وقد تبدو لك غير متكاملة . حيث يضع استاذ المادة في بعض الاحيان فقط الجزء الاول من المحاضرة من اجل الاطلاع على ما ستقوم بتحميله لاحقا . في نظام التعليم الالكتروني نوفر هذه الخدمة لكي نبقيك على اطلاع حول محتوى الملف الذي ستقوم بتحميله .
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