We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byGavin Blackburn
Modified over 2 years ago
What is Demand? ©2012, TESCCC Economics Unit 4, Lesson 1
Objectives 1.Know the definition of demand. 2.Explain the three conditions for demand. 3.Describe and construct a demand schedule. 4.Construct a demand curve. 5.Explain the law of demand. 6.List and explain the three concepts that explain the law of demand. ©2012, TESCCC
DEMAND – Definition Amount of goods and services a consumer is willing and able to buy at various prices in a given time period ©2012, TESCCC
Conditions for Demand In this definition, we see there are three conditions for demand. 1. Willingness or desire 2. Ability – Financial means 3. Given time period ©2012, TESCCC
Are you willing to buy a Maserati? Do you want one? ©2012, TESCCC
Are you able to buy a Maserati? We mean financial ability. ©2012, TESCCC
Specific Time Period Will you buy a Maserati this year? ©2012, TESCCC
All buyers generally behave the same way, so we can make some generalities. ©2012, TESCCC
When price increases... quantity demanded decreases. OR When price decreases... quantity demanded increases. ©2012, TESCCC
This is called the law of demand!!! It shows the inverse relationship between price & quantity demanded. P QD ©2012, TESCCC
Demand Schedule Demand schedule – shows quantity demanded at various prices for one consumer Market Demand schedule – shows quantity demanded by all consumers in the market ©2012, TESCCC
Price Quantity Demand Schedule ©2012, TESCCC
Demand Curve You see a demand curve slopes downward, from left to right, showing the inverse relationship between price and quantity demanded. ©2012, TESCCC
P Q ©2012, TESCCC
P Q D ©2012, TESCCC
Limitations of Demand Curve The demand curve is only accurate for one set of conditions. It only shows changes in price. If anything other than price changes then the demand curve will no longer be valid. ©2012, TESCCC
Concepts That Explain the Law of Demand (why the demand curve slopes downward) ©2012, TESCCC
1. The Income Effect The price of an item goes up or down, and it is as if your income has changed; causing the quantity demanded to change. ©2012, TESCCC
2. Substitution Effect If the price of an item changes, especially if it goes up, a consumer will substitute another item that is cheaper. This causes the quantity demanded to change. ©2012, TESCCC
3. Diminishing Marginal Utility As each additional unit of a good or service is consumed, the satisfaction received from consuming that good decreases. For example, the first hamburger you eat is great but the second is not as satisfying, so you would not be willing to pay as much for it. The third brings even less satisfaction. ©2012, TESCCC
Demand Change in QD or Change in D ©2012, TESCCC Economics Unit 4, Lesson 1.
Change in Quantity Demanded ( ▲ QD) vs. Change in Demand ( ▲ D)
Demand I. What is Demand? II. Change in Quantity Demanded III. Change in Demand IV. Diminishing Marginal Utility V. Demand Elasticity.
Unit 2: Supply, Demand, and Consumer Choice 1. This is the most important cow all year! 2.
Economics Chapter 4 Section 1. Into to Demand Demand - the desire, ability, and willingness to buy a product Demand - the desire, ability, and willingness.
Lesson 7-1 The Marketplace Consumers influence the price of goods in a market economy. -A market represents actions between buyers and sellers.
Demand and Supply CHAPTER 3. After studying this chapter you will be able to Describe a competitive market and think about a price as an opportunity cost.
D E M A N D Chapter 4 Section 1 Understanding how Demand works!
A Microeconomics Topic. Factors that Determine Demand Desire: Do I want it? Ability: Can I afford it? Willingness: Am I willing to buy it?
Change in Quantity Demanded vs. Change in Demand Chapter 4, Lesson Two.
Definition: the marginal benefit of using each additional unit of a product during a given period of time will decline.
Ch. 3: Supply and Demand: Theory Del Mar College John Daly ©2003 South-Western Publishing, A Division of Thomson Learning.
TCO 2 Given a supply schedule, a demand schedule, and a change in one or more determinants of supply and demand, graph the supply and demand curves and.
© 2010 Pearson Addison-Wesley. Markets and Prices A market is any arrangement that enables buyers and sellers to get information and do business with.
Chapter 4SectionMain Menu 4.1 Demand. Chapter 4SectionMain Menu The law of demand states that consumers buy more of a good when its price goes down and.
Chapter 3. Markets Demand and Supply analysis takes place while looking at markets For now, we will be looking only at competitive markets These markets.
CH 4: DEMAND 4-1: WHAT IS DEMAND? Notes#1. What is demand? Definition: demand is the willingness to buy a good or service and the ability to pay for it.
© 2010 Pearson Addison-Wesley CHAPTER 1. © 2010 Pearson Addison-Wesley.
Change in S vs. Change in Qs Unit Three, Lesson Two Economics.
ECON 161 Week 02: September 05, 2012 The functioning of Markets: The interaction of buyers and sellers. (Chapter 3)
Supply and Demand II Lesson 12 – 5a & 5b. The Ripple Effect:
CH.10- AGGREGATE DEMAND/AGGREGATE SUPPLY BY J.A.SACCO.
Chapter 4 The Law of Demand What is Demand? Quantity demanded of a product or service is the number that would be bought by the public at a given price.
Demand and Supply CHAPTER 4 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Distinguish between.
AP Macroeconomics Demand and Supply. Price and Quantity Price – the amount of money paid for an economic good/service – Ex. A gallon of gasoline has a.
A market is the interaction of buyers and sellers for the purpose of making an exchange, which establishes a price for the goods or services exchanged.
Chapter 03: Supply and Demand McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. 13e.
Unit 3: Aggregate Demand and Supply and Fiscal Policy 1.
Copyright © 1999 by Harcourt Brace & Company. All rights reserved. Supply and Demand.
© 2016 SlidePlayer.com Inc. All rights reserved.