The Locker Room

For my professors

Posted by at 2:10 PM

It's something I've noticed a lot lately: prices changing demand.  The only problem is that current prices cannot change (shift) demand; prices only change quantity demanded.  What people usually mean when they say "changing demand" is really "changing quantity demanded".  This may seem trivial, but as my headline suggests, I have an obligation to my professors to make the distinction.

Please refer to this tutorial from Rochester (a very solid econ program) for details.  Slides 39-46 are good.

To appease the economists in the Locker Room, I will note that expectations of future prices can and do shift demand.  There, now everyone is confused.

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