Ch 1 · Theory of Demand and Supply

5 concept points · 4 formulas · 4 exam-critical points.

📘 Core concepts

• 1Demand: quantity of a good consumers are willing & able to buy at given price.
• 2Law of Demand: inverse relation between price and quantity demanded (ceteris paribus).
• 3Determinants: price of substitutes, complements, income, taste, expectations.
• 4Elasticity: responsiveness of demand to change in price/income.
• 5Supply: quantity producers willing to sell; direct relation with price.