1. Chapter 4.1
What Is Demand?

2. An Introduction to Demand
Demand leads to competition
Desire, ability and willingness
Microeconomics
Behavior/decisions of one person/family/firm
Demand lets us answer the economic questions

3. Demand Illustrated We can put demand in a table, like this:
This is called a demand schedule
We can also graph it in a Demand Curve:
Price
Quantity Demanded
$20 1
$15 3
$10 7 $5 13

4. Let’s Try one!

5. The Law of demand Law of demand
Price & Quantity Demanded are inversely related
What does that mean?
Price goes up, quantity goes down
That’s why the demand curve is always downward sloping!

6. Normal Goods (this isn’t in the book!)
Regular well behaving goods
Some things don’t behave very well
Gasoline
Milk
Hamburger
Why do you think they “misbehave”?

7. Market Demand If we can determine demand for one we can do it for all!
Price
Quantity Jeff
Quantity Sara
Quantity Market 20 1 15 3 2 5 10 7 12 13 23

8. Demand & Marginal Utility
“For the next one”
Marginal Utility
Utility “for the next one”
Diminishing marginal utility
Ever eat your favorite candy bar?
How about several of them?
What happens after the 3rd? 4th? 12th?