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9 Demand Curve

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30 views6 pages

9 Demand Curve

Uploaded by

Dalia Soliman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Equilibrium price

• Equilibrium is a key concept in economics.


It means a state of balance or the position
towards which something will naturally
move.
Equilibrium price comes about from the
interaction between the forces of demand
and supply.
Demand Curve
Price of
Ice-Cream Cone
$3.00

2.50

1. A decrease
2.00
in price ...

1.50

1.00

0.50

0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity of
Ice-Cream Cones
2. ... increases quantity
of cones demanded.
Copyright © 2004 South-Western
Shifts in the Demand Curve
Price of

product

Increase
in demand

Decrease
in demand
Demand
curve, D2
Demand
curve, D1
Demand curve, D3
0 Quantity of
Products sold
Copyright©2003 Southwestern/Thomson Learning
Consumer Income
Price of Ice-
Cream Cone
Normal Good
$3.00 An increase in
income...
2.50
Increase
2.00 in demand

1.50

1.00

0.50
D2
D1 Quantity of
Ice-Cream
0 1 2 3 4 5 6 7 8 9 10 11 12 Cones
Consumer Income
Price of Ice-
Cream Cone
Inferior Good
$3.00

2.50 An increase in
income...
2.00
Decrease
1.50 in demand
1.00

0.50

D2 D1 Quantity of
Ice-Cream
0 1 2 3 4 5 6 7 8 9 10 11 12 Cones
Demand curve shifts to the Demand curve shifts to the
left right
---------------------------------- ----------------------------------
• Fall in income (normal • Rise in income (normal
goods) goods)
• Rise in income (inferior • Fall in income (inferior
goods) goods)
• Rise in price of • Fall in price of
complementary goods complementary goods
• Fall in price of substitutes • Rise in price of substitutes
• Fall in quality • Rise in quality
• Unfashionable • Fashionable
• Less advertising • More advertising
• Less leisure time • Increased leisure time

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