PPT-Random Demand: Fixed Order Quantity

Dr Ron Lembke Random Demand Dont know how many we will sell Sales will differ by period Average always remains the same Standard deviation remains constant How would our policies change How would our order quantity change. This module covers the relationships between price and quantity. , maximum willing to buy, maximum reservation price, profit maximizing price, and price elasticity, assuming a linear relationship between price and demand. Chapter 4. Outline. Equilibrium and the Adjustment Process. A Free Market Maximizes Producer . Plus Consumer . Surplus (the Gains from . Trade. ). Does the Model Work? Evidence . from the . Laboratory. Change in Quantity Demanded. Income Effect. Substitution . Effect. Change in . Demand . (Demand Determinants). Income. Consumer Expectations. Population. Consumer Tastes and Advertising. Complements and Substitutes. The Basic Decision-Making Units. A . firm. is an organization that transforms resources (inputs) into products (outputs). Firms are the primary producing units in a market economy.. An . entrepreneur. ©2011 John M. Abowd and Jennifer P. Wissink, all rights reserved.. The Demand Function. We will consider the market for compact disc players.. Recall that we will define the following for our market:. Any place where people come together to buy and sell goods or services.. Demand. Definition of Demand. The willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period.. THIRD EDITION. ECONOMICS. and. MACROECONOMICS. Paul Krugman | Robin Wells. What a . competitive market . is and how it is described by the . supply and demand model. What the . demand curve . and . supply curve . Objectives . Students will…. . Examine the relationship between price and quantity demanded. . Analyze how demand schedules relate to demand curve. . Draw and explain shifts in demand curves. How prices are determined (big picture). The quantity of a specific product that a buyer is . able. . and . willing. to buy at a certain price. Usually at a particular . time. and . place. Remember those . time and place utilities . that add value to a product??. Demand. Price and Quantity. Quantity Demanded. Law of Demand. Determinants of Demand. Demand. Demand is on overall indication of a consumers (buyers/purchasers) . desire. and . ability. to purchase a given good or service. What do you think effects demand?. Chapter 7. Demand and Supply. Chapter 7. Section 1. Demand. The “Marketplace”. Consumers influence the price of goods in a market economy.. Demand. : the amount of a good or service that consumers are able and willing to buy at various possible prices during a specified time period. . . Demand is the different quantities of workers that . businesses. are . willing . and. able. to hire at different wages.. What is the Law of Demand for Labor? . There is an . INVERSE. relationship between wage and quantity of labor demanded.. Connection to Circular Flow Model. Do individuals supply or demand?. Do business supply or demand?. Who demands in the product market?. Who supplies in the product market?. 2. 3. I am willing to sell several . Demand Schedule . for Cell Phones. Price. Quantity Demanded. $50.00. $100.00. $150.00. $200.00. $250.00. Plotting the Demand Schedule. Demand and Supply Explained/Econ 2.1. Changes in Quantity Demand.