Create a posting on this discussion board related to the excerpts from \"Confess

Question

Create a posting on this discussion board related to the excerpts from "Confessions of a Shopaholic." Respond to the following questions: 1. Give a definition of a demand curve. 2. Based on the movie excerpt explain how the demand curve for the green scarf can be constructed. How do customers reveal their value for the green scarf in an auction? 3. Explain also which goods are called substitutes and which goods are called complements. Give one example of substitute goods and one example of complement goods (you can use the movie excerpts or provide other examples).

Explanation / Answer

1.

Demand curve is a downward sloping curve showing the relationship between price of a good and its demand. It basically shows the inverse relation between the two.

2.

The value of the green scarf in the movie increased only because it was promoted and advertised for heavily by the Shopaholic group. It was although a normal green scarf, but it was promoted in such a way that people looked upon at it as a luxury good and bid in the auction to get the scarf.

3.

Substitutes are those goods which can be consumed in place of each other, giving equal utility to the consumer. E.g. tea and coffee

Complements are those goods which are consumed together and hold little value in the absence of other. E.g. left shoe-right shoe; tea-sugar

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