Presentation is loading. Please wait.

Presentation is loading. Please wait.

Date: March 13, 2014 Topic: The Law of Demand Aim: How does demand affect decision making? Do Now: Multiple Choice Questions.

Similar presentations


Presentation on theme: "Date: March 13, 2014 Topic: The Law of Demand Aim: How does demand affect decision making? Do Now: Multiple Choice Questions."— Presentation transcript:

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

11

12 TIME TO MAKE A MARKET DEMAND SCHEDULE.

13 How does demand affect decision making?


Download ppt "Date: March 13, 2014 Topic: The Law of Demand Aim: How does demand affect decision making? Do Now: Multiple Choice Questions."

Similar presentations


Ads by Google