EC4004, Ecs for Business, Lecture 4: Market Demand and Elasticity

The Eiffel tower and the Seine at night
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We construct market demand curves for products by horizontally summing quantities demanded of a good by each person in the market. So, if there are two people in the market for good X, at a certain price, P^{*}_{X}, individual 1 will demand X^{*}_{1} and individual 2 will demand X^{*}_{2}. We add up  X^{*}_{1}+X^{*}_{2}, and this gives us the total quantity demanded at the market at P^{*}_{X}

Market demands will be represented by capital letters from now on, and individual demands by lower case letters. 

This lecture introduces the concept of elasticity. 

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