Introduction to demand analysis, Macroeconomics


It is generally seen that market demand curve is downward sloping. Market demand curve (or sometimes called Aggregate demand curve) is nothing but the aggregation of individual demand curves. Individual demand curve can be constructed by joining different consumer equilibrium for different prices (remember that consumer can't alter the market prices, it is given to the consumer). In neo-classical consumer theory, price is exogenous variable, so demand curve can be obtain only if we change the price exogenously and join all the equilibrium points. From next on our objective is to find out the consumer demand curve, for which we will adopt ordinal theory and in that, we will take indifference curve approach.

Posted Date: 10/26/2012 2:23:40 AM | Location : United States

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