Demand Major Key Alert

Vocabulary for chapter 3 Law of Demand Demand Schedule Demand Curve Market Demand Curve Marginal Utility Diminishing Marginal Utility

Law of Demand The quantity demanded varies inversely with its price

Demand Schedule The demand schedule shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time

Demand Curve Graph showing the quantity demanded at each and every price that might prevail in the market

Lets apply the law of Demand How many of you would pay $15 for a burger? How about $3 a month?

Factors affecting demand Chapter 4 Demand Factors affecting demand

Market Demand Curve Total Demand for the entire market.

Change in quantity demanded There Only thing that change market demand curve or schedule is Complements Expectations Number of Consumers Substitutes Consumer Tastes Consumer income

Substitutes Products that can be used in place of another product

Consumer Income Consumer income can cause a change in demand, an increase in income means that people can buy more and a decrease in income means people can afford less

Complements The use of one leads to the use of the other

Consumer Taste Advertising, Trends, Rumors, Consumers concerns all affect market demand

The way people think about the future Expectations The way people think about the future

Market Demand curve can also change if with the number of consumers

Chapter 4 Demand Elasticity