Demand and SupplyWhy do roses cost more on Valentine’s Day than during the rest of the

year?

Why do TV ads cost more during the Super Bowl ($2.6 million for 30 sec.) than during Nick at Nite reruns?

Why do hotel rooms in Vail, Colorado cost more in the winter than in the summer?

Why were gas prices over $3 this summer?

Why do pro basketball players earn more than pro hockey players?

Why do economics majors earn more than most other majors?

Why are a bunch of you going to major in economics in college?

The answer to these and other economics questions boil down to the workings of demand and supply – the subject of this chapter.

““Econ, Econ”Econ, Econ”

..

AA--Rod,Rod, at at $25 $25 MMwas paid his lastwas paid his lastyear in Texas:year in Texas:$288,660$288,660 per gameper game,,$75,148 per at-bat$75,148 per at-bat,,$897,436$897,436 per home runper home run,,

& & $648,148 per win$648,148 per win..

Bledsoe, at Bledsoe, at $10 million$10 million year could purchase a year could purchase a new Ford SUV new Ford SUV each dayeach day of the yearof the year..

At At $28 million$28 million, a , a PlayStation 2 is likePlayStation 2 is likelike like .35.35 to Garnett. to Garnett.

One out of every 8,000 high school basketball One out of every 8,000 high school basketball playersplayers goes on to play goes on to play in thein the NBA. NBA.

Big DemandBig Demand, , Small SupplySmall Supply

Signed for $103 mil. for 10 years in 2001.

MARKETS DEFINED

MARKETS

POTENTIALSELLERS

POTENTIALBUYERS

$54321

DEMAND DEFINED

DEMAND SCHEDULEDEMAND SCHEDULE

Various AmountsVarious Amounts

A Series of Possible PricesA Series of Possible Prices

…a specified time period…other things being equal

P QD

1020355580

LAW OF DEMAND

• As Price Falls…

…Quantity Demanded Rises

• As Price Rises…

…Quantity Demanded Falls

An inverse relationship exists between price and quantity demanded

GRAPHING DEMANDP

Qo

$5

4

3

2

1

P QD

$54321

1020355580

Price of Corn

Quantity of Corn

CORN Plot the Points

10 20 30 40 50 60 70 80

55

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

Price of Corn

Quantity of Corn

CORN Plot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND

35

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

Price of Corn

Quantity of Corn

CORN Plot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

Price of Corn

Quantity of Corn

CORN Plot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

Price of Corn

Quantity of Corn

CORN Plot the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

D

Price of Corn

Quantity of Corn

CORN Connect the Points

10 20 30 40 50 60 70 80

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

What if

Demand

Increases?

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

D’

Increase

in

Demand

Increase

in Quantity

Demanded1020355580

30406080 +

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

What if

Demand

Decreases?

GRAPHING DEMAND

P

Qo

$5

4

3

2

1

P QD

$54321

1020355580

D

Price of Corn

Quantity of Corn

CORN

10 20 30 40 50 60 70 80

-- 10204060

D’

Decrease

in

Demand

Decrease

in Quantity

Demanded

GRAPHING DEMAND

To

MMarketarket D Demandemand

““JO”JO”

$3$3 $3$3 $3$3++ ++

3535 3939 2626

$3$3

100100From From “individual”“individual” demand to demand to “market”“market” demand demand

[Total][Total]

““Bo”Bo” ““Mo”Mo”

DD DD DD DD

==

Demand Demand - a record of how consumers buying habits changeconsumers buying habits change in response to price changes price changes. [series of QDsQDs that consumers will buy at different pricesdifferent prices]

Individual DemandIndividual Demand

.

Van GoghVan Gogh atat 19 years of age19 years of age

Vincent van GoghVincent van Gogh completed thousands of sketches and oil paintings. He sold only one, four months before his death, for 400 francs (about $100 dollars). He lived for only 37 years before he died in 1890.

Here is van Gogh’s “The Red“The Red Vineyard”Vineyard”, which sold for about $100$100.

Vincent van Gogh’s Sunflowers Vincent van Gogh’s Sunflowers

$39.9 $39.9 millionmillion

In 1987, howmuch was paidfor one of his““Sunflowers”Sunflowers”paintings?

Vincent’s first cousin, “KeeKee”, who rejected his advances.

Self portrait after Vincent cutoff his ear lobe with a razorblade in a state of fury.

He wrapped the ear lobe ina newspaper & gave it to afemale friend in a brothel.

.

Vincent van Gogh’s Self Portrait - 1889Vincent van Gogh’s Self Portrait - 1889

$71.5 million

““Little Vincent”Little Vincent”[age 13]

So – during Vincent’s life, there was “big “big supply but no demand.”supply but no demand.”

Or in other words, after his death he became ““da man.da man.””

But – after his death,there was “big demand“big demandbut small supply.”but small supply.”

““I’ll buy at 5 cents I’ll buy at 5 cents but not at 10 cents.”but not at 10 cents.”

.10““Not much business Not much business so I’m going to lower so I’m going to lower my pricemy price..

.1010

.5.5

QDQD1 1

DD

QDQD22

Lower the price & increase QDLower the price & increase QD

““MMovementovement, , just just a a movement, not a shift.”movement, not a shift.”

DemandDemand – quantities of productsquantities of products consumers are willingwilling and and ableable to buy at variousvarious pricesprices during a given time periodgiven time period...

DD11 DD22DD33

DDPP11

QDQD11

QD1 QD1

DemandDemand––willingnesswillingness to to buybuy

QDQD22

QDQD22QDQD33

PP22

Goods That Have Less Demand Than Years Goods That Have Less Demand Than Years AgoAgo

1. M. Jackson glove2. Power Rangers3. Parachute pants4. Old Jellies5. Dalmatian puppies6. Furbys7. Pogs8. Typewriters

40 million were sold

THINGS THAT USED TO BE IN DEMAND IN THE PAST

1. MP3 Players2. Cell Phones3. New Jellies4. LCD monitors5. DVD players6. Nintendo Wii7. PS38. Digital cam.9. XBOX

10. Plasma TVs11. Clown fish12. Seven jeans13. iPhones14. Portable DVDs15. Karoke Machines16. iPods17. Bratz Dolls18. Satelite TV

iPodsiPods

RAZR

Name Goods That Have Greater Demand TodayName Goods That Have Greater Demand Today

.

$5$544332211

DEMAND SCHEDULEDEMAND SCHEDULEDEMAND SCHEDULEDEMAND SCHEDULE

…a specifiedspecified time periodtime period……other things being equalother things being equal

P QQDD

10102020353555558080

Price decreasesPrice decreases; ; QD increasesQD increasesConsumersConsumers “willingness to buy”“willingness to buy”

$5

$4

$3

$2

$1

D

0 10 20 35 55 80Quantity DemandedQuantity Demanded

Graphing the Demand CurveGraphing the Demand Curve[price change, point to point movement][price change, point to point movement]

Picture of Law ofLaw of

DemandDemand

..

As price decreasesdecreases …QD increasesincreases

.1010

.60.60..2525

..2525

..1010

..6060

IInnvveerrssee relationship between price & QD

QDQD1 1 QIDQID22 QDQD33

QDQD3 3 QIDQID22 QDQD11

As price increasesincreases …QD decreasesdecreases

“Let’s also buy Dr Pepperfor just .10.”

PricePrice QDQD

LLaw of aw of DDemand for emand for Dr. PDr. Pepperepper

. “You can have it in any color you want as long as it’s black”

$850$850

Law of DemandLaw of Demand statement statement

“Every time I reduce the charge for our car by $1,I get a thousand new buyers.”

QDQD1 1

Production went from 6,000 a year to 600,000.

The “Model T”The “Model T”

$260$260

QDQD22

Where is the Mistake?Where is the Mistake?

Well, everyone knows that a price increase decreases the demand.

OK, I demand that you fix me a glass right now.

Forget it! Why did you increase your price, Oliver?

.15 LemonadeLemonade.15.15 per per glassglass

Lemonade.5 per glass

Where is the Mistake?Where is the Mistake?

DD

QD.

QDQD–particular price; point on curve

DD – QD at every price; whole curve shifts; all prices

Well, everyone knows that a price increase decreases the QDQD.

.15.15

.5.5

QDQD22 QDQD11

OK, I demand that you fix me a glass, right now.

Forget it!Why did you increase your price, Oliver?

LemonadeLemonade.5 per glass.5 per glass

.15 Lemonade.15 per glass

..

1.1. Income EffectIncome Effect - A- At t lower prices, current buyerslower prices, current buyers are richer and will buy more.are richer and will buy more.

DD

2.2. Substitution EffectSubstitution Effect - Buyers of higher priced substitutes - Buyers of higher priced substitutes will buy the lower priced substituteswill buy the lower priced substitutes

Dr. Pepper is only 10 cents.I normally buy

7-Up or Big Red.

And I normally drink RC Cola, but not if I can get a 10 cent Dr Pepper.

Reasons For Reasons For Downward SlopingDownward Sloping “ “DD” Curve” Curve

..

1. 1. Income EffectIncome Effect DD

2. 2. Substitution EffectSubstitution Effect

Utility (satisfactionsatisfaction) decreases as more of the same product is consumed.

3. 3. DDiminishingiminishing M Marginalarginal Utility Utility

I wasn’t going to buy any more shoes but they have lowered prices again.

Shoes 50% offShoes 50% off

Reasons For Reasons For Downward SlopingDownward Sloping “ “DD” Curve” Curve

Law of Law of DiminishingDiminishing Marginal Utility Marginal Utility

An exception on this would be for women. They get just as much utility [if not more] out of the 5050thth pair pair of shoes as for the 11stst pair pair.

Wal-Mart sells 20,000 pairs of shoes each hour.Wal-Mart sells 20,000 pairs of shoes each hour.

Women buy 19,000 of the 20,000 pairs of shoes.Women buy 19,000 of the 20,000 pairs of shoes.

Of course the new pair

are a different ccoolloorr.

..

53 ¾ Hotdogs 53 ¾ Hotdogs && Still Talking Trash Still Talking Trash

The Japanese “The Japanese “TsunamiTsunami” Wins Again” Wins Again

Takeru KobayashiTakeru Kobayashi, at 112112 lbs. before the contest (& 130130

afterwards) won the “Nathan’s Famous Hot Dog”“Nathan’s Famous Hot Dog” contest

for the 4th year in a row with 53 3/453 3/4 hot dogs in 12 minutes,bettering his old record by ¼ hot dog. This contest has been held every year on July 4 since 1916. In 2nd place

was 410410 pound Eric “Badlands”“Badlands” Booker, who could barely eat 30barely eat 30. At 320 calories320 calories per hot dog, he put 17,120 calories17,120 calories into his stomach in 12 minutesin 12 minutes, thus the 18 extra pounds18 extra pounds.

How He Did ItHow He Did It

Determinants of Demand(SPICE = Shift the Curve Right or Left)

1.Substitutes (prices of)

2.Preferences and Population

3.Income

4.Complements

5.Expectations

Change in Taste for American FlagsChange in Taste for American Flags

Increase in demand for flags after the attack on the World Trade Center

DD11 DD22

Demand for Clown Fish increased fourfold after Demand for Clown Fish increased fourfold after “Finding Nemo” even thought they cost $28.00“Finding Nemo” even thought they cost $28.00

[The #1 movie of 2003 grossed $340 million][The #1 movie of 2003 grossed $340 million]

Demand for clown Demand for clown fish after Nemofish after Nemo

$28$28

The good news is that Nemo has finally been found.The good news is that Nemo has finally been found.The bad news is the condition The bad news is the condition in whichin which he was he was

found.found.

DD11 DD22

Increase in DemandIncrease in Demand [For horse racing after “Seabiscuit”“Seabiscuit”]

SS

PP11

PP22

QQ11 QQ22

SeabiscuitSeabiscuit, the undersized, crooked-leggedracehorse became the most “beloved horse“beloved horseof all time.”of all time.” Offspring were called ““little biscuits.”little biscuits.” Died at age 14of a heart attack.

..

SeabiscuiSeabiscuit wins by 4 lengths.t wins by 4 lengths.[and War AdmiralWar Admiral becomes Rear AdmiralRear Admiral]

Let’s Take A Look At The 1938 Race.Let’s Take A Look At The 1938 Race.[[War AdmiralWar Admiral v. v. SeabiscuitSeabiscuit]]

Change in Change in IncomeIncome

Normal GoodNormal Good – goods whose demand varies directlydirectly with income.Inferior GoodInferior Good – goods whose demand varies iinnvveerrsseellyy with income.

Income

Demand For

SpamDemand

For

Steak

PopulationPopulation (direct)(direct) (# of consumers)

Market size can increase/decrease.

Ex: The large ““baby boombaby boom”” of 1946-64increased the demand for baby supplies. An increase in life expectancy increased demand for for medical care, retirementcommunities, and nursing homes.

Consumer ExpectationsConsumer Expectations

Consumer expectations about future productfuture product priceprice, future future availabilityavailability, & future incomefuture income.

Ex: When the Korean WarKorean War broke out in thesummer of 1950, new carcar sales boomed (also washerswashers and refrigeratorsrefrigerators) out of the expectation of a production stoppage like during WWII. None occurred but it was the expectationexpectation that affected new car demandnew car demand.

carcar

QD1 QD2

1. Substitute goodsSubstitute goods(“competing goodscompeting goods”) - price change of one affects the demand of the other directlydirectly.

Ex: 77Up & Coke, Honda & ToyotaUp & Coke, Honda & Toyota

2. Complementary goodsComplementary goods(“go togethergo together”) - price change of one affects the demand for the other inverselyinversely. Ex: Camera & film, cereal & milk, or coffee & donutsCamera & film, cereal & milk, or coffee & donuts

Prices ofPrices of Related GoodsRelated Goods

DD11 DD22

QDQD2 2 QDQD11

D2

D1

PricePriceOfOf

77UPUP

Demand Demand for for

Dr Dr PepperPepper

Substitutes – DirectSubstitutes – Direct[IncreaseIncrease in price of one; increaseincrease in “D” of the other]

P

PP22

PP11

QDQD22 QDQD11

QD QD QDQD

DD

CCoommpplleemmeennttss –– iinnvveerrssee[DecreaseDecrease in price of one; increaseincrease in the “D” for the other]

Car PricesCar Prices

Gasoline DemandGasoline Demand

PP

QD QD QDQD

DD11 DD22

They are so cheap that They are so cheap that even dogs are buying carseven dogs are buying cars

P1P2

QD1 QD2

D

PricePriceOfOf

iPod NanoiPod Nano

Demand Demand for for

Microsoft ZuneMicrosoft Zune

Substitutes – DirectSubstitutes – Direct[IncreaseIncrease in price of one; increaseincrease in “D” of the other]

P

PP22

PP11

QDQD22 QDQD11

QD QD QDQD

PricePriceOfOf

ChickenChicken

Demand Demand for for

TurkeyTurkey

Substitutes - DirectSubstitutes - Direct

..Hot Dogs Hamburgers

Pancakes Syrup

““Substitutes”Substitutes”

PricePriceDecreasesDecreases

PricePriceDecreasesDecreases

PPDD22

DD DD11

QDQD22 QD QD11QDQD1 1 QDQD22

PP11

PP22

““CCoommpplleemmeenntts”s”

PricePriceDecreasesDecreases

DemandDemandIncreasesIncreases PP

DD11 DD22DD

PP11

PP22

QDQD1 1 QD2QD2 QDQD11 QDQD22

SubstituteSubstitute//CCoommpplleemmeenntt RelationshipsRelationships

I would like to talk to you today about two products.

Source: American Diabetes Association

Now you say to yourselves again, what do bicycles and insulin have in common

20 M

Insulin Bicycles

$1

$2

$3

$100

100 200 500

$100

$200

$300

Insulin BicyclesCannot be delayed

Can be delayed

Insulin Bicycles

Few substitutesCannot be delayed

Many SubstitutesCan be delayed

Insulin Bicycles

Few substitutesCannot be delayedInexpensive

Many SubstitutesCan be delayedexpensive

4. The total receipts test: Price X Quantity = Revenue

$3 X 20 m =

$2 X 20 m =

$1 X 20 m =

$ 60,000,000

$ 40,000,000

$ 20,000,000

$300 X 100 =

$200 X 200 =

$100 X 500 =

$ 30,000

$ 40,000

$ 50,000

20 M

Insulin Bicycles

$1

$2

$3

$100

100 200 500

$100

$200

$300

P X Q = Revenue

P X Q = Revenue

Pop is Elastic!Pop is Elastic!

InelasticityInelasticity of Milk of Milk

ElasticElastic or or InelasticInelastic(Total Receipts Test)(Total Receipts Test)

Total Receipts TestTotal Receipts Test20 x $2 = $40.0020 x $2 = $40.00

Total Receipts TestTotal Receipts Test20 x $2 = $4020 x $2 = $40

20 30 40 5020 30 40 50

$2$2

$1$1

InelasticInelastic ElasticElastic

30 x $1 = $30.0030 x $1 = $30.00 50 x $1 = $5050 x $1 = $50

Elastic DemandElastic Demand1.1. SubstitutesSubstitutes(butter)2.2. LuxuryLuxury (mink coat)3.3. ExpensiveExpensive (car)4.4. Has durabilityHas durability (refrigerator)

Inelastic DemandInelastic Demand1.1. No substitutesNo substitutes (milk)2.2. NecessityNecessity (insulin)3.3. InexpensiveInexpensive (safety pin)4.4. No durabilityNo durability (pencil)

..

Elastic Demand For Cassette TapesElastic Demand For Cassette Tapes

-$1-$1

DD “TR” Test$2.50x100,000=$250,000$1.50x600,000=$900,000 +$650,000+$650,000

EElastic lastic DDemand emand FFor or CCassette assette TTapesapes

Total ReceiptsTotal Receipts Test Test

$2.50=$250,000$2.50=$250,000$1.50=$900,000$1.50=$900,000 + $650,000+ $650,000

-$1-$1

DD

“TR” Test$2.50x100,000=$250,000$1.50x600,000=$900,000 +$650,000+$650,000

+25+25% % QDQD

-$1

DD““TR” TestTR” Test

$2 = $30 bil.$1 = $20 bil. -$10 bil.-$10 bil.

EElasticlastic oror IInelasticnelastic DemandDemandElastic or Inelastic Demand

Elastic

Inelastic

Estimating the Elasticity of DemandEstimating the Elasticity of Demand3 Key Questions:3 Key Questions:

1. Subs? 2. Necessity? 3. Expensive?1. Subs? 2. Necessity? 3. Expensive?

Review of DemandReview of Demand

Price Changes for SubstitutesSubstitutes & CCoommpplleemmeennttss

Substitutes - DirectSubstitutes - Direct

Dr Pepper

Complements - IComplements - Innvveerrssee

CokeCokePP11

PP22

PP11

PP22

QDQD11 QD QD22

DD

DD DD11

D2D2

DD11 DD22MotorcyclesMotorcycles

HelmetsHelmets

__1. Which will cause an “Increase in D”“Increase in D” for MP3 Player phones?

a. increase in income c. increase in the price of MP3 Player phones b. decrease in income d. decrease in the price of MP3 Player phones___2. Which will cause an “Increase in QD”“Increase in QD” for MP3 Player phones? a. decrease in income c. decrease in the price of MP3 Player phones b. increase in income d. increase in the price of MP3 Player phones___3. Which will cause a “Decrease in D”“Decrease in D” for Projectors? a. increase in the price of projectors c. decrease in # of consumers b. decrease in the price of projectors d. increase in projector taste___4. Which will cause a “Decrease in QD”“Decrease in QD” for Projectors? a. increase in the price of projectors c. decrease in # of consumers b. decrease in the price of projectors d. increase in projector taste

A

C

C

A

MP3 Player Phone[stereo sound, downloadablesound games and ring tones]

1. What would cause an “increase in QD”“increase in QD” for Snickers? a. increase in price of Snickers b. decrease in price of Snickers c. decrease in income d. increase in number of consumers

2. What would cause an “increase in D”“increase in D” for Snickers? a. increase in taste b. decrease in price of Snickers c. decrease in income d. increase in the price of Snickers

3. What would cause a “decrease in QD”“decrease in QD” for Snickers? a. increase in taste b. decrease in price of Snickers c. increase in price of Snickers

4. What would cause a “decrease in D”“decrease in D” for Snickers? a. decrease in income b. increase in taste c. decrease in price of Snickers

5. An “increase in the price of ButterfingersButterfingers would cause a(n) (increase/decrease) in (QD/D) for SnickersSnickers?

QDQD & & D D PracticePractice Quiz Quiz[[SSnickersnickers]]

1. (Demand/Supply) is identified as quantities consumers are willing and able to buy at various prices during a given time period.2. The lawlaw of of demanddemand says that price & QDprice & QD are (directly/inversely) related.3. The most important variablemost important variable influencing decisions to produce and purchase goods is (technique/price). (Price/income) is not heldnot held constantconstant when when moving along a stable demand curvemoving along a stable demand curve.4. Income effect-theIncome effect-the increase or decrease in purchasing powerincrease or decrease in purchasing power brought on by a change in (taste/market size/price).5. Substitution effectSubstitution effect – tendency to substitutesubstitute a (higher/lower) -priced product for a more expensive product.6. Diminishing marginal utilityDiminishing marginal utility – – utilityutility, or (determination/anger/satisfation)

decreases as more of the same product [Snickers] is consumed.7. The law of demandlaw of demand refers to a (movement/shift) along a demand curve.8. Substituting chickenSubstituting chicken as the price of steak goes upsteak goes up is an example of the (income/substitution) effect.9. When the price of price of caviar fallscaviar falls, the purchasing power of our money income rises & thus permits us to purchase more caviar. This is the (income/substitution) effect.10. The demand (curve/schedule) is a numerical tabulationnumerical tabulation showing QD at each price. The demand (curve/schedule) is a graphical representationgraphical representation of the law of demand.

NS 1-10NS 1-10

11. ElasticityElasticity of of demanddemand–the way price affects (attitude/quantity/market size).

12. (Inelastic/Elastic) demand – demand that is very responsivevery responsive to price. [A small price increase causes a large decrease in quantity demanded.]13. (Inelastic/Elastic) demand-when a change in price has little impact on QDchange in price has little impact on QD..14. The 3-item test for 3-item test for elastic demandelastic demand are substitutes, luxury items, and (inexpensive/expensive) items.15. The 3-item test3-item test for inelastic demandfor inelastic demand are no substitutes, necessities, and (inexpensive/expensive) items.16. Expensive carsExpensive cars have (inelastic/elastic) demand.17. Pepsi ColaPepsi Cola has (inelastic/elastic) demand.18. InsulinInsulin has (inelastic/elastic) demand.19. The elastic demand curveelastic demand curve is more (horizontal/vertical). [much change]20. The inelastic demandinelastic demand curve is more (horizontal/vertical). [not much change]

NS 11 - 20NS 11 - 20

21. With the invention of the calculatorinvention of the calculator, the demand curve for the slide rule (increased/decreased). 22. When Forest Gump went to ChinaForest Gump went to China & the U.S. followed by opening up relations with Chinaopening up relations with China, the demand curve for Coke (increased/decreased). 23. An increase in incomeincrease in income would (increase/decrease) the demand for used clothingused clothing. [inferior good]24. A decrease in incomedecrease in income would (increase/decrease) the demand for lobster. [normal good]25. A decrease decrease in thein the price price of of product product XX [lumber] will (incr/decr) the demand for the ccoommpplleemmeennttaarryy product product Y. [nails]26. After Brooke ShieldsBrooke Shields[15] did her national TV ads[“Nothing comes between me and my Calvin’s”], the “D” curve moved (right/left).

NS 21-26NS 21-26

27. An increase in the price of Pepsiincrease in the price of Pepsi causes the demand curve for CokeCoke to move to the (right/left). 28. If there is a sale on shirtssale on shirts, the demand curve for tiesties will move to the (right/left). 29. If a man’s workplace is about to close downman’s workplace is about to close down, his demand curve for major purchasesmajor purchases would move to the (right/left).30. If a cure for lung cancercure for lung cancer were found, the demand curve for cigarettescigarettes would move to the (right/left).31. If the price of pancakes decreasesprice of pancakes decreases, the demand for syrupsyrup, a ccoommpplleemmeenntt, will (increase/decrease).32. If the priceprice of of butter decreasesbutter decreases, the demand for margarinemargarine will (incr/decr).

33. A “change in QD”“change in QD” is caused by (price change/TIMER) [a “movement”]34. A “change in D” is caused by (price change/TIMER) [a “shift”]

NS 27-38NS 27-38

e