Econ 101 Demand Notes: MV, TV, TE, CS, Demand Curve, Market Demand, and Shifts

Value (willingness to pay)

What a person gives up for a good; can vary per unit.

Total Value (TV)

Sum of marginal values for all units consumed.

Marginal Value (MV)

Benefit from the next unit; tends to diminish with increased consumption.

Total Expenditure (TE)

Actual money spent; calculated as TE = P * Q.

Consumer Surplus (CS)

Net benefit; calculated as CS = TV - TE.

Demand Schedule

Table showing quantity an individual buys at various prices.

Demand Curve

Graphical representation of the demand schedule; typically downward-sloping.

Market Demand

Horizontal sum of individual demand curves.

Change in Quantity Demanded

Movement along the demand curve due to price change.

Change in Demand

Shift of the entire demand curve due to non-price factors.

Law of Demand

Price and quantity demanded are inversely related; due to diminishing marginal value.

Consumer Surplus Formula

CS(Q) = TV(Q) - TE(Q)