Bell Work Get out your notebook. Think about your favorite item in the vending machine. What is it? How many would you be willing to buy at the $1 price point? How many would you be willing to buy at $.50? $.25? $.01? How many would you be willing to buy at $1.50? $2? $10?

Demand

What is Demand? Demand is more than having the desire to own an item. Demand is the ability and willingness to pay for something. Demand is a concept specifying the different quantities of an item that will be bought at different prices.

introduction to demand Demand is central to a market economy. Demand involves two variables: Price Quantity of a specific product at a given point in time

Introduction to demand A demand schedule shows the various quantities demanded of a good at all prices that might prevail in the market at a given time.

Introduction to demand A demand schedule shown graphically is a demand curve

Law of Demand There is an inverse relationship between the price of an item and the quantity demanded Higher prices are associated with smaller amounts demanded on most goods and services we buy

Law of Demand

Demand and Marginal Utility As we buy more of item we get less satisfaction from each additional purchase. Utility is the amount of a product satisfaction or usefulness one receives from its use. Marginal utility is the extra amount of satisfaction or usefulness you receive from one more unit purchased. As we use more of a product, we encounter diminishing marginal utility.