Download presentation
Presentation is loading. Please wait.
Published byOwen Griffin Modified over 9 years ago
1
Date: March 13, 2014 Topic: The Law of Demand Aim: How does demand affect decision making? Do Now: Multiple Choice Questions.
2
Would you buy a slice of pizza for lunch if it cost:
3
What is demand?
4
The law states that all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease.
5
Demand results from two patterns of behavior: OR When a consumer reacts to the increase in price of one good by consuming less of that good, and more of a substitute good.
6
Demand results from two patterns of behavior: Buy fewer slices of pizza and do not substitute. Consumption goes down. That is the income effect!!! Price decrease, feel wealthier, consumption increases
7
Based on the chart: How does an increase in the price of A affect consumption of other goods?
8
A table that lists the quantity of a good that a person will purchase at each price in a market. Shows the quantities demanded at each price by all consumers in the market.
9
DEMAND CURVE Representation of a demand schedule. Shows relationship between the price of the good and the quantity purchased. Slopes downward: Law of Demand. Remember: As the price of a good/service increases, the quantity purchased will decrease.
10
A Demand Schedule Price of DVD MOVIES Number of DVD MOVIES People Want to Buy $5.0018 $10.0013 $15.0010 $20.00 5 $25.000
12
TIME TO MAKE A MARKET DEMAND SCHEDULE.
13
How does demand affect decision making?
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.