In the case of the price-setting market, after all participants had made their decisions, the lowest price was identified and assumed to be the market price in order to compute the corresponding total quantity demanded
. This amount would be allocated equally among all the lowest-price firms.
But the low foreign demand elasticity militates against offsetting falls in quantity demanded
abroad in response to the higher price.
This would cause a reduction in quantity demanded
of the product, whether foreign or locally produced, a reduction in imports, and an increase in production of locally produced substitutes.
In equation (24), [P.sub.o], [P.sub.L], and [Q.sub.L] refer to values given by equations (4), (9), and (10), respectively, and [Q.sub.L]([P.sub.o]) is the quantity demanded
by low elasticity consumers when price equals [P.sub.o].
For instance, at a price below $20, the amount that buyers are willing to buy exceeds the amount that sellers are willing to part with, whereas the opposite scenario prevails at a price above $20, with the quantity supplied at such a price outstripping the quantity demanded
Domestic quantity demanded
of nonwovens in Japan (Unit: tons, %) 2003 2004 2005 2006 2007 2008 2009 Output 296,258 296,540 313,886 329.992 340,142 338.479 287.427 Export 34.276 39,194 4 2.324 44.719 51,830 52.054 42,964 volume Import 55,359 61,415 70.498 75.072 82.459 95.216 95.797 volume Domestic 317,341 318.761 342,060 360.345 370,771 381.641 340,260 demand Import 17.4 19.3 20.6 20.8 22.2 24.9 28.2 rale 2010 201] 2012 Output 317.299 312.251 321.930 Export 49,847 48,927 49.660 volume Import 108.297 122,214 128.940 volume Domestic 375.749 385,538 401.210 demand Import 28.8 31.7 32.1 rale Note) Import ratio shows the percentage of import volume in domestic demand.
As demonstrated above, a relaxation of the prohibition of marijuana from relatively strict to relatively loose can be expected to lower price and increase the quantity demanded
. Past experience with decriminalization indicates that the increase in demand is not very large and mainly comes from a shift of demand from other drugs such as alcohol.
While the Europeans may think we are mad for using lead bullets this is the only way for the shooter of average means to afford to fire the piece in the quantity demanded
for proficiency in competition.
The minimum wage prevents some of these trades from taking place by reducing the quantity demanded
The right panel moves these same curves so that demand is direct, i.e., at a price of zero, quantity demanded
is 4 (the intercept on the vertical axis, now representing quantity).
The second-tier price is based on the price elasticity of demand and set to equate the quantity demanded
equal to the water available, given the size of the declared shortage (Table 1).
The first ratio within brackets on the right-hand-side is the Keynes effect, or the change in the equilibrium aggregate quantity demanded
that results from a price-level induced change in the real money supply, ceteris paribus.