| 41. | Recall that the demand curve represents our consumer s maximum willingness to pay for any given output.
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| 42. | This higher quantity demanded would cause the demand curve to shift outward to a new position D2.
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| 43. | Just like the supply curves reflect marginal cost curves, demand curves are determined by marginal utility curves.
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| 44. | The demand curve would therefore shift to the right and real GDP would be growing above potential.
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| 45. | Third the x intercept of the marginal revenue curve is half that of the inverse demand curve.
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| 46. | The relevant range of product demand is where the average cost curve is below the demand curve.
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| 47. | The market demand curve is obtained by summing the quantities demanded by all consumers at each potential price.
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| 48. | This is why on the kinked demand curve model the lower segment of the demand curve is inelastic.
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| 49. | Each group of consumers effectively becomes a separate market with its own demand curve and marginal revenue curve.
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| 50. | This is why on the kinked demand curve model the lower segment of the demand curve is inelastic.
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