Warm Up Describe the relationship between consumers and producers. In a market economy, what determines the WHAT, HOW, and WHO? What are some products that are in high demand today? Opinion: What is your favorite candy?

Demand Economics Standard 12.12.1 Learning Goal: I will understand how demand effects the market by analyzing the demand curve.

Shopping

I. Demand (what you want to buy) The desire to purchase a particular item at a specified price & time, accompanied by the ability and willingness to pay

Grocery Shopping

II. Demand Schedule A. A chart that shows the number of items bought at a particular price

Demand Schedule

III. Demand Curve A line on the graph that shows the amount of a product that will be purchased at each price Vertical “Y” Axis = price Horizontal “X” Axis = quantity The curve has a negative slope

Demand Curve

IV. Law of Demand As the price of an item increases in the market the quantity demanded will go down (and vice-versa) As the price in a market decrease, people tend to… purchase the product buy larger quantities Avoid substitute products

V. Marginal Utility usefulness a consumer gets from each additional item purchased Law of Diminishing Marginal Utility: each additional item purchased is less useful than the previous

Diminishing Marginal Utility