1-2.2. Movements Along vs. Shifts in the Demand Curve

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来自 University of Illinois at Urbana-Champaign 的课程

Firm Level Economics: Consumer and Producer Behavior

426 个评分

University of Illinois at Urbana-Champaign

Firm Level Economics: Consumer and Producer Behavior

426 个评分

课程 1（共 7 门，Specialization Managerial Economics and Business Analysis ）

All goods and services are subject to scarcity at some level. Scarcity means that society must develop some allocation mechanism – rules to determine who gets what. Over recorded history, these allocation rules were usually command based – the king or the emperor would decide. In contemporary times, most countries have turned to market based allocation systems. In markets, prices act as rationing devices, encouraging or discouraging production and encouraging or discouraging consumption in such a way as to find an equilibrium allocation of resources. We will construct demand curves to capture consumer behavior and supply curves to capture producer behavior. The resulting equilibrium price “rations” the scarce commodity. Markets are frequent targets of government intervention. This intervention can be direct control of prices or it could be indirect price pressure through the imposition of taxes or subsidies. Both forms of intervention are impacted by elasticity of demand. After this course, you will be able to: • Describe consumer behavior as captured by the demand curve. • Describe producer behavior as captured by the supply curve. • Explain equilibrium in a market. • Explain the impact of taxes and price controls on market equilibrium. • Explain elasticity of demand. • Describe cost theory and how firms optimize given the constraints of their own costs and an exogenously given price. This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.

从本节课中

Module 1: Scarcity, Allocation, and Markets

The fundamental problem of scarcity challenges us to think about an allocation mechanism to determine what is produced and who consumes it. We will discuss scarcity and allocation mechanisms. In this course, we will focus on markets and prices as the solution to this resource allocation problem.

1-2.1. More on the Demand Curve6:39

1-2.2. Movements Along vs. Shifts in the Demand Curve3:36

1-2.3. Constructing the Supply Curve7:25

1-2.4. Movements to New Equilibrium11:07

与讲师见面

Larry DeBrock
Dean Emeritus and Professor of Finance and Professor of Economics
University of Illinois, Urbana-Champaign College of Business Department of Business Administration

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Now, before we leave demand,

we need to think a little bit about jargon, so

that we're all on the same page of the book when we talk about this curve.

And so the jargon we're gonna talk about is the difference between a shift

in the demand curve versus movements along a demand curve.

Our jargon for this shift is going to be a change in demand.

And our jargon for movements along is going

to be a change in quantity demanded.

This may not make much sense right now, but it's fundamentally important

that you and I are on the same page of the book about what you mean when you tell me,

oh, demand is going to increase, or, oh, demand is going to fall.

You may think that if price were to increase you might say, well,

at a higher price demand will fall.

That's not quite true because you see, we've constructed our demand curve

To tell us what consumers actually do for different possible prices.

So if you were to move price up or

down along this axis, this curve tells us how people move up or down that axis.

The curve itself is called demand, it's stationary to a change in price.

A change in price, you move along it.

So for a change in price, that's a movement along a demand curve,

we say change in quantity demanded.

For example, if I told you price were to go from P0 to P1,

we know that the consumers purchase level,

which would have originally been Q0, will fall to Q1.

This movement along the demand curve is a change in quantity demanded.

Now, some things will actually change the whole demand curve.

If the government were to announce today a new study that said,

this particular product, let's say it's oranges.

If you consumed two oranges a day,

you'd reduce your probability of some dangerous disease by 30%.

What we know, if something like that were to come about, lots of people would

wanna buy more of this product overnight, regardless of what the price is.

The demand curve itself would have shifted, this shift we say,

is a change in demand.

Demand has grown for this product,

because of some change in the underlying characteristic.

It could be the product itself has gotten better,

it could be that population has grown.

And there's more people wanting this product than we had before,

that would also cause this demand curve to shift out to the right.

Shifts, we refer to as change in demand.

Movements along, we refer to as change in quantity demanded.

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