Do you want BuboFlash to help you learning these things? Or do you want to add or correct something? Click here to log in or create user.



#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #subject-5-revisiting-the-consumers-demand-function
As the price of a product declines, the lower opportunity cost will induce consumers to buy more of it since it becomes less expensive - even if they have to give up other products. This is called the substitution effect.
If you want to change selection, open document below and click on "Move attachment"

Subject 5. Revisiting the Consumer's Demand Function
o an increase in the quantity demanded of Q2Q4. This can be shown on a demand curve. There are two different phenomena underlying a consumer's response to a price drop: <span>As the price of a product declines, the lower opportunity cost will induce consumers to buy more of it since it becomes less expensive - even if they have to give up other products. This is called the substitution effect. To isolate this effect diagrammatically, we move the new budget line inwards and parallel until it is tangent to the old indifference curve. The new slope reflects


Summary

statusnot read reprioritisations
last reprioritisation on suggested re-reading day
started reading on finished reading on

Details


Discussion

Do you want to join discussion? Click here to log in or create user.