1. Demand
Standard 1.3.2

2. What does the word demand mean? Explain what you demand
Bellwork
What does the word demand mean?
Explain what you demand

3. Quick Q
What are some of the most influential factors in determining peoples choices in the marketplace?

4. Law of Demand: Definition…
An Increase price causes decrease in Quantity Demanded
Decrease in price causes an increase in Quantity Demanded

5. Quick Write
With your table partner, make a quick list of “products/goods” you think are the best selling of ALL time. If you can make a TOP 10.
We will then see how close you to the actual list!

6. h i Law of Demand THE MORE SOMETHING IS, THE LESS PEOPLE CAN BUY
Quantity demanded and price move in opposite direction
Price Quantity
Goes Demanded
h i
THE MORE SOMETHING IS, THE LESS PEOPLE CAN BUY

7. Would you rather have a 5 dollar pizza or a 135 dollar pizza?!
Lets test it out!
Would you rather have a 5 dollar pizza or a 135 dollar pizza?!

8. i h Law of Demand Price Quantity Goes Demanded
THE CHEAPER SOMETHING IS, THE MORE PEOPLE CAN BUY

9. Demand vs. Quantity Demanded
Demand: how many things you would be willing to buy at many difference prices
Quantity Demanded: how many things you would buy at one specific price/time period

10. HW Objective: I can define demand and explain the law of demand
Language Objective: I can discuss the concept of demand and the law of demand
HW:
The Next Great Invention
Finish Chapter Vocab from textbook

11. Explain the law of demand
Bellwork
Explain the law of demand

12. Demand
Essential Question: How do consumers use the law of demand to respond to changes in market condition?

13. What influences your demand?
What influences your demand? Why does the Law of Demand exist? Three main things…
1. Income Effect
2. The Substitution Effect
3. Diminishing Marginal Utility

14. 1
Income Effect: any increase or decrease in consumer’s purchasing power caused by change in price
Our resources ($$) is limited so price changes can impact our demand

15. Pause Talk and Turn Table Partners
When and where was the last time you ate out at an actual dine in restaurant? Did you consider expensive? Was it worth it? (use cost-benefit analysis skills)

16. Income Effect Applied
“Restaurant customer traffic is down—especially during the lunch hours—and the big reason why is that going out to eat simply costs too much.”
“NPD researchers found that many restaurants have increased prices to the point that consumers now feel like they’re poor values.”

17. TALK AND TURN TABLE PARTNERS ROUND 2!
Which one is better? Which one would you rather buy? Which one can you buy?

18. 2
Substitution Effect: When customers choose not to buy an expensive thing but buy a cheaper, similar thing instead
Growth of Dollar Stores: “And Dollar General isn’t the only dollar chain to have had success in recent years. Competitors Dollar Tree and Family Dollar have also experienced significant growth in revenue since the 2008 recession, when many consumers began shopping at discount chains for everyday items like cleaning supplies, toiletries and groceries.”

19. Diminishing Marginal Examples…
What decreases as Squidward eats the crabby pattys?
Value of each food item
Is demand limitless?
No!

20. Diminish=Go down Utility= Value 3
Diminishing Marginal Utility: As more units of a product are consumed, the satisfaction received from consuming each additional unit goes down
Diminish=Go down
Utility= Value

21. Pause & Free Write
We all have a diminishing marginal utility story! No it does NOT have to involve only food.
Take 2 minutes and free write a story or long example that fits with our understanding of diminishing marginal utility
Share-Out

22. Graphing… What does diminishing utility look like visually by graph?
This is the same way we graph demand

23. Demand Schedule Do a quick sketch of this chart (A and B, and C only)
Charts!

24. Objective / HW
Objective: I can describe the factors that change demand
Language Objective: I can read and discuss the factors that change demand
HW:
“Create Your Own Demand Schedule & Graphing Assignment”
Follow directions properly with Law of Demand and examples from notes
Basics of Demand Assignment
Finish Chapter 4 Vocabulary

25. Describe the substitution effect What is diminishing marginal utility
Bellwork
Describe the substitution effect
What is diminishing marginal utility

26. What is a demand curve?
Demand Curve: a graph showing how the demand for a commodity or service varies with changes in its price.

27. Demand Curve: the quantities demanded at each price by consumers
Law of Demand
**Price is the main variable affecting demand but will NEVER shift demand**
Demand Curve: the quantities demanded at each price by consumers

28. Determinants of Demand
Other factors influence demand as well, its not just price
These factors can shift the entire demand curve left or right, instead of simply causing a slide along the old demand curve
These are called the Determinants of Demand

29. Determinates of Demand
MAIN IDEA:
If demand increases the demand curves SHIFTS to the
RIGHT

30. Determinates of Demand
MAIN IDEA:
If demand decreases the demand curve SHIFTS to the
LEFT

31. 5 Determinates of Demand
1. Changes in Number of Consumers 2. Changes in Income 3. Changes in Tastes and Preferences 4. Substitutes 5. Complementary Goods

32. Determinants of Demand

33. Increase in Number of Consumers
The demand curve moves right (increases) when number of consumers grows
More people = More Demand

34. Decrease in Number of Consumers
The demand curve moves left (decreases) when number of consumers shrinks
Less people = Less Demand

35. More Money = More Demand
Changes in Income
The demand curve moves right (increases) when Income grows
More Money = More Demand

36. Less Money = Less Demand
Changes in Income
The demand curve moves left (decreases) when income shrinks
Less Money = Less Demand

37. Changes in Tastes and Preferences
The demand curve moves right (increases) when people choose to buy certain items because of fads or popularity
More Sales = More Demand

38. Changes in Tastes and Preferences
The demand curve moves Left (decreases) when the items becomes less popular.
Less Sales = Less Demand

39. Less Competition = More Demand
Substitutes
The demand curve moves right (increases) when the price of a similar item goes up
Less Competition = More Demand

40. More Competition = Less Demand
Substitutes
The demand curve moves left (decreases) when the price of similar item goes down
More Competition = Less Demand

41. Complementary Goods
The demand curve moves right (increases) when the price of a complementary good goes down

42. Complementary Goods
The demand curve moves left (decreases) when the price of a complementary good goes up

43. Key Point to Remember!!
The price of the product itself will never cause a shift (left/right) in demand.
Only the 5 Determinants will shift the demand curve and create a brand new one.

44. \
What has caused this shift in demand? A. an increase in the price of film
B. an increase in the price of cameras
C. a decrease in the price of film
D. a decrease in the price of cameras

45. Which direction does the Demand Curve Move?
Situation: The Ford and Chrysler have just guaranteed a 15% cut in wages for all employees. What will happen to the demand for luxury goods in areas with a lot of auto workers? What determinate are we using?: CHANGE IN INCOME What direction will the Demand Curve move?: LEFT

46. Which direction does the Demand Curve Move?
Situation: If Kroger has a great sale on spaghetti sauce, what effect should they expect it to have on spaghetti noodles? What determinate are we using?: COMPLIMENTARY GOODS What direction will the Demand Curve move?: RIGHT

47. Objective / HW
Objective: I can analyze the determinants of demand and their ability to shift a demand curve
Language Objective: I can read and discuss how the determinants of demand shift a demand curve
HW:
Analyzing the Determinants of Demand
Finish Chapter 4 Vocab

48. What are the determinants of demand?
DO NOW
What are the determinants of demand?
What is the one thing that will never shift demand?

49. Real Life Activity with Demand!

50. HW
Objective: I can evaluate the law of demand using real life examples
Language Objective: I can read and discuss the law of demand using real life examples
HW:
Demand Hotel Activity
Finish Early?
Make sure your formative work is completed!
Chapter 4 Vocab
Basics of Demand
Analyzing the Determinants of Demand

51. “Do Now” (Rubber Band)
As a consumer, how sensitive are you to changes in an increase price?
What are products you would continue to buy after a price increase?
What are products you would stop buying?

52. Price Elasticity of Demand
Main Idea:
Elasticity of Demand: measures how much the Quantity Demanded changes when price goes up or down

53. Elastic Demand
Definition: Elastic Demand: Situation in which a given rise or fall in a products price “greatly” affects the amount that people are willing to buy Big Change in Quantity Demanded!

54. Things that we want, but do not need
Elastic Demand
Examples:
Things that we want, but do not need
Higher priced goods, Brand name items, luxury goods

55. Inelastic Demand
Definition: Inelastic Demand: Situation in which a product’s price change has “little” impact on the Quantity Demanded by consumers

56. Inelastic Demand
Examples: These are Needs and will still be purchased regardless of price Medication, staple foods, Gasoline

57. More Info
HOW DO I FIGURE OUT IF A PRODUCT OR SERVICE IS INELAESTIC OR ELASTIC! Write them down!

58. HW
Objective: I can describe and analyze the concept of “elasticity/inelasticity”
Language Objective: I can read and speak about elasticity/inelasticity
HW:
Futurama Questions Video Review
Elastic Demand Examples Worksheet

59. Review Guide Define: Law of Demand
What affects a slide along the demand curve?
Determinants of Demand / Shifting the Curve
Substitution Effect
Income Effect
Diminishing Marginal Utility
Demand Inelastic / Elastic (Understand differences between the two)

60. Explain the difference between inelasticity and elasticity
Do Now
Explain the difference between inelasticity and elasticity