demand sfls
TRANSCRIPT
![Page 1: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/1.jpg)
Supply and Demand model
![Page 2: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/2.jpg)
Supply and Demand Model
- A Competitive Market
Assumptions:- market with many buyers and many
sellers and perfect information.
To began analyzing the model and to make it work, we assume a few assumptions in place first:
- No monopolies. 没有垄断
![Page 3: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/3.jpg)
Supply and Demand Model
- A Competitive Market
Assumptions:
To began analyzing the model and to make it work, we assume a few assumptions in place first:
- Rational Thinking - People usually exploit opportunities to make themselves better off.
![Page 4: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/4.jpg)
Supply and Demand Model
- A Competitive Market
Assumptions:
To began analyzing the model and to make it work, we assume a few assumptions in place first:
- Rational Thinking
- Ceteris Paribus - A Latin word for – “All else being the same”
在其他条件不变的情况下
![Page 5: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/5.jpg)
Supply and Demand Model
- A Competitive Market
Assumptions:To began analyzing the model and to make it work, we assume a few
assumptions in place first:
- Rational Thinking- Ceteris Paribus It’s important to note, that just
because you want something doesn’t always mean you Demand it.
( Demand is only what we can measure. )
Key point:We will focus on Demand
first
![Page 6: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/6.jpg)
So do you like cake?
![Page 7: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/7.jpg)
Would you like one like
this?
![Page 8: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/8.jpg)
Or would you like one like
this?
![Page 9: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/9.jpg)
I was hoping these pictures would have you think about cake differently.
Why did I show you this?
First you wanted cake... then you didn’t.
But I never talked about prices of cake!!!
![Page 10: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/10.jpg)
- Ceteris Paribus, (all other things staying the same) the relationship between the quantity demanded and the price of a good. 你要多少 , 在一个给定的的价格
Supply and Demand Model
Demand
![Page 11: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/11.jpg)
Do you like Chicken?
![Page 12: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/12.jpg)
Or maybe not like chicken?
![Page 13: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/13.jpg)
- Ceteris Paribus, (all other things staying the same) the relationship between the quantity demanded and the price of a good. 你要多少 , 在一个给定的的价格
Supply and Demand Model
Demand
This idea change is a change in Demand
![Page 14: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/14.jpg)
Would you buy it at this
price?
![Page 15: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/15.jpg)
99 元
127 元 Would you
buy it at this price now?
![Page 16: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/16.jpg)
- The amount of anything that people are willing and able to buy during a specified period at a specified price. 现在购买, 在这个价位
Supply and Demand Model
Quantity Demanded
This change due to price is a change in Quantity
Demanded
![Page 17: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/17.jpg)
- The amount of anything that people are willing and able to buy during a specified period at a specified price. 现在购买, 在这个价位
Supply and Demand Model
Demand
Quantity Demanded
This one is about prices
This one is NOT about
prices
![Page 18: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/18.jpg)
- The amount of anything that people are willing and able to buy during a specified period at a specified price. 现在购买, 在这个价位
Supply and Demand ModelDemand
Quantity Demanded
- Ceteris Paribus, (all other things staying the same) the relationship between the quantity demanded and the price of a good. 你要多少 , 在一个给定的的价格+
=The Law of Demand
Ceteris Paribus, (all other things staying the same) If the price of a good rises, the quantity demanded decreases. If the price of a good falls, the quantity demanded increases
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Supply and Demand ModelThe Law of Demand
Ceteris Paribus, (all other things staying the same) If the price of a good rises, the quantity demanded decreases. If the price of a good falls, the quantity demanded increases
This is a movement along the demand curve and does not change where the demand curve is.
Price
Price
Quantity Demanded
Quantity Demanded
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788.18.9
10.011.514.2
Price of chicken (per
pound/500kg)
Quantity of chicken demanded (billions of pounds/500kg)
654321
7
Demand Schedule for chicken
DEMAND
70 9 11 1513 17
7
6
5
4
3
2
1
Price of chicken
(per pound)
Quantity of chicken (billions of pounds)
Demand curve, D
A movement along the demand curve is a change in the quantity demanded of a good that is the result of a change in that good’s price.
![Page 21: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/21.jpg)
788.18.9
10.011.514.2
Price of chicken (per
pound/500kg)
Quantity of chicken demanded (billions of pounds/500kg)
654321
7
Demand Schedule for chicken
DEMAND (quantity)
70 9 11 1513 17
7
6
5
4
3
2
1
Price of chicken
(per pound)
Quantity of chicken (billions of pounds)
Demand curve, D
A
B
A movement along the demand curve is a change in the quantity demanded of a good that is the result of a change in that good’s price.
![Page 22: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/22.jpg)
7 8.1 9.70 10 1513 17
$2.00
1.75
1.50
1.25
1.00
0.75
0.50 D1 D2
A C
B
A shift of the demand curve…
… is not the same thing as a movement along the demand curve
Price of chicken
(per 500kg))
Quantity of chicken (billions of
500kg)
Changes (shifts) in DEMAND
![Page 23: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/23.jpg)
Changes in Demand without the price changing
Shift Left
Shift Right
DEMAND (shifts)
This is a shift of the demand curve itself at any given price
= Less Demand at the same price
= More Demand at the same price
![Page 24: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/24.jpg)
An “increase in demand” means a rightward shift of the demand curve: at any given price, consumers demand a larger quantity than before. (D1D2)
Shifts of the Demand Curve
A “decrease in demand”, means a leftward shift of the demand curve: at any given price, consumers demand a smaller quantity than before. (D1D3)
Price
Quantity
D3 D1 D2
Increase in demand
Decrease in demand
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Changes (shifts) in DEMAND
(NOT quantity demanded)
1.) Number of Buyers2.) Income
i) Normal goodsii) Inferior goods
3.) Prices of Related Goodsi) Substitutesii) Compliments
a.) Composite Demand
b.) Joint Demand4.) Preferences5.) Expectations
The short answer is: Everything else that is NOT due to a change in price!
5 main reasons:
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More people = more Demand at every given priceLess people = less Demand at every given price
Changes (shifts) in DEMAND
1.) Number of Buyers
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Demand…
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More Demand…
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2.) Incomei.) Normal good
Demand increases when income increases
Demand decreases when income decreases
A good for which
and
Changes (shifts) in DEMAND 1.) Number of Buyers
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Income Increase
i.) Normal good
Demand increasesBuy more of this at the same price
Income Decrease
Demand decreases Buy less of this at the same price
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2.) Incomei.) Normal good
Changes (shifts) in DEMAND 1.) Number of Buyers
ii.) Inferior good
Demand increases when income decreases
A good for which
and
Demand decreases when income increases
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Income Increase
Demand decrease Buy less of this at the same price
Income Decrease
Demand increasesBuy more of this at the same price
ii.) Inferior good
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goodsi.) Substitutes替代
Demand increases, if the price of its substitutes rises.
A good that can be consumed in place of another good.
Demand decreases, if the price of its substitutes falls.
and
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Price of this goes up
i.) Substitute
Increase Demand of this
= Buy less of it but more of this =
Price of this goes down
Decrease Demand of this
= Buy more of this but less of this =
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goodsi.) Substitutes
ii.) Complement 补充 A good that is consumed with another good.
Demand increases, if the price of its complements falls.
and
Demand decreases, if the price of its complements rises.
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Price of this goes up Decrease demand of this
= Buy less of it and buy less
of this =
Price of this goes down Increase demand of this
= Buy more of it and buy more
of this =
(the price of this didn’t change)i.) Complement
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goodsi.) Substitutes
ii.) Complement 补充
- Composite Demand A good of service demanded that has multiple uses.
![Page 38: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/38.jpg)
Ipads can have many
uses
![Page 39: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/39.jpg)
But usually in my house only one use
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goodsi.) Substitutes
ii.) Complement 补充
- Composite Demand - Joint Demand When two or more goods are
demanded to satisfy the same want.
not substitutes for each other, but are complement each other.
![Page 41: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/41.jpg)
Cars + Gasoline = Let’s go!
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goods
4.) Preferences 首选项When preferences change, the demand for
one item increases and the demand for another item (or items) decreases.
![Page 43: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/43.jpg)
More people used to smoke because it was
OK
![Page 44: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/44.jpg)
Today preferences
have changed in many places
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2.) Income
Changes (shifts) in DEMAND 1.) Number of Buyers
3.) Prices of Related goods4.) Preferences
Expected future income and expected future prices influence demand today.
For example:if the price of a computer is expected to fall next month, the demand for computers today decreases.
5.) Expectations 期望
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Expecting rain?
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means higher demand for an
umbrellas
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Changes (shifts) in DEMAND
(NOT quantity demanded)
1.) Number of Buyers2.) Income
i) Normal goodsii) Inferior goods
3.) Prices of Related Goodsi) Substitutesii) Compliments
a.) Composite Demand
b.) Joint Demand4.) Preferences5.) Expectations
The short answer is: Everything else that is NOT due to a change in price!
5 main reasons:
![Page 49: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/49.jpg)
Individual Demand All of these factors are related to individual demand of stuff.
We want to also look at markets as a whole of many people.
We have seen so far that number of buyers is related to changes in demand.
Supply and Demand Model
![Page 50: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/50.jpg)
Individual Demand
Supply and Demand Model
The sum of the demands of all the buyers in a market.
Add up each person’s Individual Demand = Market Demand
Market Demand
![Page 51: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/51.jpg)
All these reasons discussed are for individual people
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++
++
++
=
For the market, just add them all
up!
![Page 53: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/53.jpg)
So to Summarize…
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Supply and Demand Model
- A Competitive Market
Assumptions:
To began analyzing the model and to make it work, we assume a few assumptions in place first:
- Rational Thinking
- Ceteris Paribus - A Latin word for – “All else being the same”
在其他条件不变的情况下
![Page 55: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/55.jpg)
- The amount of anything that people are willing and able to buy during a specified period at a specified price. 现在购买, 在这个价位
Supply and Demand ModelDemand
Quantity Demanded
- Ceteris Paribus, (all other things staying the same) the relationship between the quantity demanded and the price of a good. 你要多少 , 在一个给定的的价格+
=The Law of Demand
Ceteris Paribus, (all other things staying the same) If the price of a good rises, the quantity demanded decreases. If the price of a good falls, the quantity demanded increases
![Page 56: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/56.jpg)
Supply and Demand ModelThe Law of Demand
Ceteris Paribus, (all other things staying the same) If the price of a good rises, the quantity demanded decreases. If the price of a good falls, the quantity demanded increases
This is a movement along the demand curve and does not change where the demand curve is.
Price
Price
Quantity Demanded
Quantity Demanded
![Page 57: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/57.jpg)
7 8.1 9.70 10 1513 17
$2.00
1.75
1.50
1.25
1.00
0.75
0.50 D1 D2
A C
B
A shift of the demand curve…
… is not the same thing as a movement along the demand curve
Price of chicken
(per 500kg))
Quantity of chicken (billions of
500kg)
Changes (shifts) in DEMAND
![Page 58: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/58.jpg)
Changes (shifts) in DEMAND
(NOT quantity demanded)
1.) Number of Buyers2.) Income
i) Normal goodsii) Inferior goods
3.) Prices of Related Goodsi) Substitutesii) Compliments
a.) Composite Demand
b.) Joint Demand4.) Preferences5.) Expectations
The short answer is: Everything else that is NOT due to a change in price!
5 main reasons:
![Page 59: Demand SFLS](https://reader036.vdocuments.net/reader036/viewer/2022062523/58d016a61a28ab97708b4863/html5/thumbnails/59.jpg)
The EndThank you