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The Davenant–King Law of Demand
Published in 1699 by Charles Davenant based on data from Gregory King, this law articulated the relationship between a crop's harvest size and its market price. It specifically analyzed the price of corn, calculating, for example, that a 10% shortfall in the harvest would result in a 30% price increase.
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Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ
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Willingness to Pay (WTP)
Gregory King (1648–1712)
Charles Davenant (1656–1714)
The Davenant–King Law of Demand
Law of Demand
A Graph Showing Two Alternative Demand Curves (D and D')
Impact of Demand Curve Steepness on Pricing Power
Price Elasticity of Demand
Estimating a Demand Curve via Consumer Surveys
Linearity of Supply and Demand Curves as a Simplification
Activity: Analyzing a Hat Shop's Price Change
Inverse Demand Function: Price as a Function of Quantity
Direct Demand Function: Quantity as a Function of Price (Q = D(P))
Definition of Aggregate Demand
The Price-Quantity Trade-Off in Firm Pricing Decisions
Market Demand Curve for Baguettes in a City (Figure 8.7)
Coffee Shop Pricing Strategy
A local coffee shop observes that when they price a latte at $4.00, they sell 200 lattes per day. When they increase the price to $4.50, they sell 150 lattes per day. Which statement best analyzes the relationship between these two observations?
The Logic of the Downward-Sloping Demand Curve
Critique of a Luxury Brand's Pricing Strategy
A bakery is analyzing the demand for its gourmet cupcakes, which follows a typical downward-sloping demand curve. Match each price-quantity point on the curve with the statement that best interprets the consumer behavior at that point.
According to the principles illustrated by a typical demand curve, a company that develops a new technology to significantly increase its production capacity for a popular gadget should expect to be able to sell the increased quantity at a higher price per unit.
A marketing analyst is studying consumer behavior for a new brand of gourmet coffee. The demand curve they have plotted is a steep, downward-sloping line. What does the steepness of this curve imply about the relationship between the coffee's price and the quantity consumers are willing to buy?
The downward slope of a demand curve illustrates the inverse relationship between price and quantity demanded; this means that as the price of a product falls, the quantity that consumers are willing to purchase will typically ____.
Jerry Hausman's 1996 Study on Cereal Demand
A market research firm has collected data on the weekly demand for a new brand of energy drink at various price points. Arrange the following price-quantity combinations in the order they would appear on a standard demand curve, starting from the point with the highest price and lowest quantity.
Linear vs. Non-Linear Demand Curves
Video Game Launch Pricing
Learn After
Harvest Shortfall and Price Impact
An economic observation from the 17th century noted that a 10% shortfall in a nation's corn harvest could lead to a 30% increase in its price. Which of the following statements best analyzes the underlying economic principle behind this disproportionate price change?
Harvest Surplus and Price Prediction
Two individuals, Alex and Ben, are choosing between combinations of apples and oranges. Their preferences are represented by indifference curves. Although the shapes of their indifference curves are identical, the utility levels assigned to them are different. For Alex, three of his curves are labeled U=10, U=20, and U=30. For Ben, the corresponding, identically-shaped curves are labeled U=5, U=100, and U=1000. Based on this information, what can be concluded about their preferences?
Applicability of a Historical Economic Principle
A 17th-century economic observation noted a specific, non-linear relationship between the size of a corn harvest and its market price. It stated that a 10% shortfall in the harvest would lead to a 30% price increase, while a 20% shortfall would lead to an 80% price increase. Imagine you are a merchant in that era and you learn that the upcoming harvest is expected to be 20% below normal. Based on this observation, what price change should you anticipate?
A 17th-century economic observation noted that a 10% shortfall in a nation's corn harvest could lead to a 30% increase in its price. Based on the economic reasoning behind this observation, it is logical to conclude that a similar 10% shortfall in the supply of a luxury good, like imported spices, would produce a similarly large price increase.
Energy Shift and Economic Growth
A 17th-century government, observing that a small (e.g., 10%) shortfall in the national grain harvest leads to a very large (e.g., 30%) price increase and public unrest, is considering policy interventions. Based on the economic principle underlying this observation, which of the following policies would be most effective at stabilizing the price of grain during a poor harvest, and why?
A 17th-century economic observation noted that a small shortfall in the harvest of a staple food crop led to a disproportionately large increase in its price. Based on this principle, match each of the following goods with the most likely price change you would expect from a uniform 10% reduction in its market availability during that era.