2. Demand  Demand – desire, ability, and willingness to buy a good/service  The amount of a product that a consumer (individual) or group of consumers (market) will purchase at a given price  Market – group of buyers and sellers of a good/service  In a market system, buyers and sellers determines the prices of goods based on supply and demand

3. The Law of Demand  Law of Demand – prices are low, consumers will buy more; prices are higher, consumers will buy less. Inverse/negative relationship between price and the QD of a product.  Quantity Demanded – specific amount of the products buyers are willing and able to purchase. Prices influence the quantity demanded of a product QD Quantity Demanded Increases Price Prices of Products Decreases Price Prices of Product Increases QD Quantity Demanded Decreases

4. Change in Quantity Demanded $3.50$1.00

5. Change in Quantity Demanded $3.50 $1.00

6. The Demand Schedule Price of Ice Cream Quantity Demanded $3.000 2.502 2.004 1.506 1.008.5010.1012 Demand Schedule - a table that lists the quantity of a good that one person will purchase at each price in the market

7. Substitution Effect  Substitution Effect – when consumers react to an increase in a good’s price by consuming less of one good and more of another goods $3.99$4.99 $3.99

8. 1.Demand Schedule ◦ The list of the total amount consumers are willing and able to buy at all prices at a specific point in time. ◦ A chart Two Ways to Show Demand PriceQuantity 101 82 63 44 25

9. Demand Curve ◦ The graphical representation of the total amount consumers are willing and able to buy at all prices at a specific point in time.

10. Price Quantity 8 6 23 Demand Schedule PriceQuantity 101 82 63 44 25 The Demand Curve is always downward sloping, because as the Price goes down people want to buy more.

11.  The demand curve will NEVER shifts if it is just due to PRICE.  When price changes, it is only a change along the curve, up and down, and only the quantity demanded will change with the new price. Why does the demand curve shift?

12. Determinants of demandWhat this means T Change in Consumer Tastes, Preferences and Fads More Popular = More Demand = Increase in Demand Less Popular = Less Demand = Decrease in Demand I Change in consumer income More $ = More Demand = Increase in Demand Less $ = Less Demand = Decrease in Demand M Change in the members of population More People= More Demand = Increase in Demand Less People = Less Demand = Decrease in Demand Why does the demand curve shift? TIMER

13. E Change in consumer expectations Think it will cost more later, BUY NOW = More Demand = Increase Think it will cost less later, BUY LATER = Less Demand = Decrease R Change in the price of Related Goods (Substitute Goods) Sub Price Less = Decrease Demand for Original Product (won’t buy it) Sub Price More = Increase Demand for Original Product (will buy it) Change in the price of Related Goods (Complementary Goods) Comp Price Less = Increase Demand for original (Buy both) Comp Price More = Decrease Demand for original (Don’t buy either)

14. What does the shift look like? Price Qua ntit y Increase Demand

15. What does the shift look like? Price Quantity Decrease Demand

16. Let’s Practice! These are NOT in your packet! Follow along on the Smart board! With whiteboards! Oooooooh! P Q

17. P Q  On your whiteboard, Draw your Base Graph  Now, read the Headline AND corresponding question.  Think about TIMER Will it cause an increase or decrease in demand? Which shifter?  Show this on your graph by drawing a NEW demand curve… Don’t forget about IRDL! __ ___ in Demand in _____________________ Consumer Income

18. P Q  On your whiteboard, Draw your Base Graph  Now, read the Headline AND corresponding question.  Think about TIMER Will it cause an increase or decrease in demand? Which shifter?  Show this on your graph by drawing a NEW demand curve… Don’t forget about IRDL! _____ in Demand in _____________________ Tastes/Pref/Fads

19. P Q  On your whiteboard, Draw your Base Graph  Now, read the Headline AND corresponding question.  Think about TIMER Will it cause an increase or decrease in demand? Which shifter?  Show this on your graph by drawing a NEW demand curve… Don’t forget about IRDL! _____ in Demand in _____________________ PRICE QUATITY DEMANDED

20. P Q  On your whiteboard, Draw your Base Graph  Now, read the Headline AND corresponding question.  Think about TIMER Will it cause an increase or decrease in demand? Which shifter?  Show this on your graph by drawing a NEW demand curve… Don’t forget about IRDL! _____ in Demand in _____________________ Consumer Expectations

21. P Q _____ in Demand in _____________________ Price of Related Good (Complementary)

22. P Q _____ in Demand in _____________________ Price of Related Good (Substitute)

23. P Q _____ in Demand in _____________________ Members of Population

24. P Q _____ in Demand in _____________________ PRICE QUATITY DEMANDED

25. DEMAND HEADLINES Independent In-Class Practice

27.  How will this information likely affect the demand curve for Taco Bell Tacos? A: Taco Bell Raises Prices on All Menu Items ______ in Quantity Demanded in __PRICE____________________ Price Quantity

28.  How will this information likely affect the demand curve for Papa Johns Pizza? B: Pizza Hut Offers $10 Pizza Deal ______ in Demand in __Price of Substitute Good_______ Price Quantity

29.  How will this information likely affect the demand curve for CDs bought at F.Y.E? C: F.Y.E Announces 5% Price Cut on all CDs ______ in Quantity Demanded in __PRICE____________________ Price Quantity

30.  How will this information likely affect the demand curve for golf balls? D: Price of Golf Clubs Increases 5% ______ in Demand in _Price of Complementary Goods Price Quantity

31.  How will this information likely affect the demand curve for hotels in Florida? E: Vacationers Travel South in Search of Warmer Winter Weather ______ in Demand in _Number of Buyers Price Quantity

32.  How will this information likely affect the current demand curve for automobiles? F: Automakers Predict a 15% Price Decrease in 2016 Automobiles ______ in Demand in _Consumer Expectations Price Quantity

33.  How will this information likely affect the demand curve for boot cut jeans? G: Hot New Craze Among Teens – Skinny Jeans ______ in Demand in _Tastes & Preferences/FADS Price Quantity

34.  How will this information likely affect the demand curve for concert tickets? H: Delaware State Employees Receive a 2.5% Increase in Salary ______ in Demand in _Consumer Income Price Quantity

35.  How will this information likely affect the demand curve for baseball tickets? I: Maryland Waste Collection Employees Receive a 5% Decrease in Salary ______ in Demand in __Consumer Income_______ Price Quantity

36.  How will this information likely affect the demand curve for skinny jeans? J: Who Cares about Skinny Jeans? Khakis are In! ______ in Demand in __Tastes & Preferences/FADs____ Price Quantity

37.  How will this information likely affect the demand curve for Burger King’s Whopper Sandwich? K: McDonald’s Reduces the Price of the Big Mac ______ in Demand in __Price of a Substitute Good_____ Price Quantity

38.  How will this information likely affect the demand curve for iPads? L: A New Study Suggests Buying an iPad Will Increase Student Achievement ______ in Demand in _Consumer Expectations___ Price Quantity

39.  How will this information likely affect the demand curve for hoodies from American Eagle? M: Abercrombie & Fitch Raises Price on All Hoodies ______ in Demand in __Substitute Good_______ Price Quantity

40.  How will this information likely affect the demand curve for Jiffy Peanut Butter? N: No More Grapes – Welch’s Jelly Prices Skyrockets ______ in Demand in _Price of a Complementary Good_ Price Quantity

41.  How will this information likely affect the demand curve for hotels in Rehoboth Beach? O: Winter in Rehoboth Beach is Like a Ghost Town ______ in Demand in __Number of Consumers____ Price Quantity

42.  How will this information likely affect the demand curve for hybrid cars? P: Researchers Suggest Buying a Hybrid Car Will Save the Environment ______ in Demand in _Consumer Expectations___ Price Quantity

43.  How will this information likely affect the demand curve for tickets to Six Flags? Q: Students Flock to Six Flags During Spring Break ______ in Demand in _Number of Consumers___ Price Quantity

44.  How will this information likely affect the demand curve for softballs? R: Softball Bat Prices to Decrease Dramatically ______ in Demand in Price of Complementary Goods_ Price Quantity

45.  How will this information likely affect the demand curve for Converse shoes? S: The 80’s are Back! More People Buying 80’s Style Fashions ______ in Demand in _Tastes & Preferences/FADs___ Price Quantity

46.  How will this information likely affect the demand curve for DVDs? T: A Job Well Done – California Department of Education Rewards Teachers with 5% Salary Increase ______ in Demand in _Consumer Income___ Price Quantity

47.  How will this information likely affect the demand curve for movie tickets at Regal Cinemas? U: Regal Cinemas Slashes Ticket Prices! ______ in Quantity Demanded in __PRICE____________________ Price Quantity

48. Pop Quiz! Whaaaaat?