c4 Flashcards
Demand Curve
price of a good or service and the quantity demanded by consumers
marshal supply and demand curve cross
demand and supply together determined the equilbrium price and quantity of a good
What are the five reasons demand curve changes?
taste, income, change in complement or substitute, change in market, change in expectations
What determines the shape of the demand curve?
change in input, shift in technology
price elasticity of demand
a measure of the sensitivity of demand to changes in price
demand function
a representation of how quantity demanded depends on prices, income and preferences
consumer surplus
an extra value individual receives from consuming a good over what they pay for it
market demand
the total quantity of goods or services demanded by all potential buyers
market demand curve
the relationship between the total quantity demanded of a good or service and its price, holding all other factors constant
elasticity
measures of the percentage change in one variable brought about a 1 percent change in some other variable
price elasticity of demand
the percentage change in the quantity demanded was good in response to a 1 percentage change in its price while holding other determinants of demand constant
income elasticity of demand
% change in quantity demanded / % change in income
cross-price elasticity of demand
the percentage change in the quantity demanded of one good divided by the percentage change in the price of another good
