Price P Quantity Demanded Qd $

Price P Quantity Demanded Qd $ P Q D Qd just a point on the curve. is the entire curve. To be on the demand curve a person must be WILLING and ABLE to purchase the product or service.

Price P Quantity Demanded Qd $ P Q D Qd just a point on the curve. is the entire curve. There is an ___________ relationship between price and quantity. inverse

Q D Quantity demanded--it is the amount that will be purchased at a specific P. Definitions: Demand--it is a schedule of quantities of goods and services that will be purchased at various prices at a specified time, all other things held constant.

Q D

Q D Qd just a point on the curve. is the entire curve. Price changes Quantity Demanded Price DOES NOT CHANGE DEMAND!!!!!!!!

Only one variable Qd PRICE PRICE DOES NOT DEMAND!!

GUESS HOW MANY DETERMINANTS OF DEMAND THERE ARE? 8 And if you don’t memorize these variables, YOU WILL FAIL THIS CLASS!! ARE THERE ANY QUESTIONS?

Eight Determinants of Demand: 1. # of consumers

6 $36.95

Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods As people’s incomes go up demand for normal goods increases. As people’s income go down, demand for normal goods decrease. As people’s incomes go up demand for inferior goods decreases. As people’s income go down, demand for inferior goods increases.

______Used Furniture Store______Lazy Boy Store

$25

Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences

Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes

Eight Determinants of Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes 6. Price of related products: Complements

Eight variables that shift Demand: 1. # of consumers 2. Income--Normal Goods 3. Income--Inferior Goods 4. Preferences 5. Price of related products: Substitutes 6. Price of related products: Complements 7. Expected future P’s by consumers 8. Expected future Y by consumers

Q S Quantity supplied--it is the amount that will be sold at a specific P. Definitions: Supply--it is a schedule of quantities of goods and services that will be sold at various prices at a specified time, all other things held constant. P

GUESS HOW MANY DETERMINANTS OF SUPPLY THERE ARE? 5 And if you don’t memorize these variables, YOU WILL FAIL THIS CLASS!! ARE THERE ANY QUESTIONS?

Five determinants of Supply: 1. # of suppliers 2. Costs 3. Physical Availability of Resources 4. Technology 5. Expected Future Prices by Consumer