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Price Determination


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Changes in the conditions of demand or supply


Equations are omitted for technical reasons - download the original pdf

Changes in the conditions of demand or supply lead to changes in the equilibrium price and quantity demand. The graphs make this quite clear. [Diagram goes here - download the original pdf to see it.] An improvement in the conditions of demand leads to an outward shift of the demand curve. This causes the price of the good to increase from P to and the quantity demanded to increase from Q to .
Contents of
Price Determination

1 Consumer behaviour, law of diminishing marginal utility
2 Price as a measure of utility
3 Market
4 Effective demand
5 Demand curve
6 Normal goods
7 Properties of the demand curve
8 Supply
9 Interaction of supply and demand
10 Changes in the conditions of demand or supply

Related articles: (1) Money and Exchange, (2) Price Determination