1. Demand

2. Demand The amount of a good or service that a consumer is willing and able to buy at various possible prices during a given time period. The graph can be any shape/curve, as long as it is pointing down! $ # of Goods/Services

3. Quantity Demanded The amount of a good or service that a consumer is willing and able to buy at each particular price during a given time period. $100 22 # of iPods Price Of iPods At $100 dollars per iPod, the quantity demanded is 22.

4. Law of Demand An increase in a good’s price causes a decrease in the quantity demanded. A decrease in a good’s price causes an increase in the quantity demanded. EXAMPLE: –You want to buy an iPod. If it is cheap, do you have a high demand or low demand for it? If the price goes up, does your demand increase or decrease?

5. P = D, P = D Demand for Twix $.50 $1.00 $1.50 $2.00 5101520 At $1.00 per candy bar, about 16 Twix are demanded by students in this class. If the price of Twix increases to $1.50 per candy bar, the quantity demanded will DECREASE to ????? D -1 D -2 Think about how you react to price changes… Quantity Demanded

6. Diminishing Marginal Utility As more units of a product are consumed, the satisfaction received from consuming each additional units declines.