A: demand

1: demand

Demand represents the amount of a commodity that an individual is willing and able to buy at a given time at various possible prices.

Two main points: first, individuals have the willingness to buy; Second, individuals are able to pay

2: Factors affecting demand

The price of related goods
- Between alternatives: There is a negative correlation between the price of one good and the amount of demand for another alternative good.
- Complementarities: There is a positive correlation between the price of one good and the amount of demand for another complementary good.
Consumer income
- With the increase of people’s income, people’s consumption of normal goods increases; For consumers, inferior products are often not enthusiastic about, so there is a negative correlation between demand and income.
Price forecasts
- The level of the expected price and the current consumption of consumers, there is a change in the same direction. That is, when the price is expected to rise, the current demand of consumers will increase, and vice versa.

3: Law of demand

Law of demand: price increases, quantity demanded decreases, that is, price decreases, quantity demanded increases

4: Changes in demand and demand

2: supply

1: supply

Supply is the quantity of a product that an enterprise is willing to produce and sell at a given price over a given period of time.

2: Factors affecting supply

3: Supply rules and exceptions

4: Change of supply quantity and change of supply

The higher the price, the higher the quantity supplied, and factors other than price affect demand

Three: market equilibrium and law of supply and demand

1: Equilibrium price and equilibrium quantity

Equilibrium refers to the adjustment of a “selected” set of intrinsically related variables so that the model formed by these variables has no inherent tendency to change.

Market equilibrium is the market state when supply and demand are equal.

The price when the market reaches equilibrium is the equilibrium price and the quantity when the market reaches equilibrium is the equilibrium quantity.

2: Law of supply and demand

3: The application of equilibrium price

Four: elastic

1: The meaning of elasticity

Elasticity refers to the sensitivity of dependent variables to changes in independent variables.

2: Price elasticity of demand

Price elasticity of demand refers to the sensitivity of the change of demand to the change of commodity price. It’s the percent change in quantity over the percent change in price

3: Elastic fox calculation

4: Point elasticity calculation

Five: preference and utility

1: preferences

A consumer’s preference is the ordering of the combination of goods that consumers may consume according to their own wishes.

2: the utility

The degree of satisfaction consumers get from the consumption of goods and services is called Utility.

Total utility refers to the total satisfaction degree or total utility obtained by consumers consuming a certain amount of goods or services in a certain period.

Marginal utility refers to the increase (or decrease) of the total utility that consumers get when they increase (or decrease) the consumption of a unit of goods or services in a certain period, which is the increment of the utility quantity brought by the consumption of the last unit of goods or services.

3: the law of diminishing marginal utility

4: Indifference curve and marginal replacement rate

Indifference curve

Features:

Marginal replacement rate

Six: Budget constraints

1: Budget constraint line

Budget constraints: Limits on the mix of spending a consumer can afford

2: Budget constraint line movement

Lecture 3: How do companies make decisions

1: Rational enterprises pursue profit maximization

1.1: Factors of production

If an enterprise wants to organize production, it must invest certain manpower, material resources and financial resources. We call factors of production all human, material and financial resources necessary to organize production

1.2: Production function

The production function represents the relationship between the quantity of various production factors used in production and the maximum output that can be produced in a certain period of time under the condition that the technical level remains unchanged.

Diminishing marginal returns

2. Income analysis of the enterprise

2.1: Short-term change rule of revenue: marginal revenue transmission

2.2. Long-term change rule of returns: returns to scale

Returns to scale, also known as returns to scale, refers to the changing state of output (returns) caused by the change of all factors of production in the same proportion under the condition that technological level and factor price remain unchanged