1. Holt Economics
12/31/2018
CHAPTER 3
Demand
Chapter 3

2. Demand
We all have powers as consumers. We have an effect on the prices of certain products.
Demand is the amount of goods or services consumers are willing to buy at a certain price.

3. Difference between demand and the quantity demanded.
SECTION 1
Nature of Demand
Difference between demand and the quantity demanded.
demand—consumer demand at various prices
quantity demanded—consumer demand at each particular price

4. Law of demand: Nature of Demand SECTION 1
There is an inverse relationship between a product’s price and the quantity demanded.

5. What demand schedules and demand curves illustrate:
SECTION 1
Nature of Demand
What demand schedules and demand curves illustrate:
Demand schedules show in table format
the quantity of products consumers are willing to buy at a series of possible prices
the quantity of products consumers are able to buy at a series of possible prices
Demand curves show in graph format
the data listed in demand schedules
the rate of change for demand at each price

6. SECTION 2
Changes in Demand
When a product’s demand shifts, different quantities of a product are demanded at each and every price.

7. Determinants of product demand shifts:
SECTION 2
Changes in Demand
Determinants of product demand shifts:
consumer tastes and preferences
market size
income
prices of related goods
consumer expectations

8. Difference between substitute goods and complementary goods:
SECTION 2
Changes in Demand
Difference between substitute goods and complementary goods:
substitute goods—used to replace the purchase of similar goods when prices increase
complementary goods—commonly used with other goods

9. SECTION 3
Elasticity of Demand
Demand elasticity reflects the extent to which changes in a product’s price affect the quantity demanded by consumers.

10. Difference between elastic and inelastic demand:
SECTION 3
Elasticity of Demand
Difference between elastic and inelastic demand:
elastic demand—when a small change in a product’s price results in a significant change in the quantity demanded
inelastic demand—when a change in a product’s price has only a slight effect on the quantity demanded

11. Inelastic demand a products price is not effected by demand.
This happens because you have a product that is a necessity. Demand stays the same regardless of price change.

12. Demand elasticity is measured by using the total-revenue test.
SECTION 3
Elasticity of Demand
Demand elasticity is measured by using the total-revenue test.