ECONOMICS Demand

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ECONOMICSDemand

• Staker

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DEMAND

• DEMAND desire, ability and willingness to buy a
  product.
• Measured by sales.

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DEMAND CURVE

• DEMAND CURVE shows how much consumers will
  demand at each and every price.
• Demand curves always go DOWNWARD
• Supply curves always go UPWARD

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LAW OF DEMAND

• LAW OF DEMAND
• as prices go up demand goes down
• As prices go down demand goes up

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Law of Demand

• The law of demand says that when a goods price
  is lower, consumers (you) will buy more of it.
  (On the other hand, when prices are higher
  consumers will buy less of it.)

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Demand Schedules

• A market demand schedule shows the quantities
  demanded at each price by all consumers in the
  market.
• An individual demand schedule shows the
  quantities demanded at each price by one consumer
  in the market

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Demand Curve

• A demand curve is a graphic representation of a
  demand schedule. The curve or line usually
  slopes downward and to the right.

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CHANGE IN DEMAND

• CHANGE IN DEMAND when people are willing to buy
  more or less of a product at the SAME PRICES.
• Curve shift to LEFT decreased demand
• Curve shift to RIGHT increased demand

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WHY DOES DEMAND CHANGE?

• Consumer Income As income goes up/down,
  consumers buy more/less of a product.
• Consumer Tastes Advertising, trends, and even
  seasons can affect demand.
• Prices of Related Products change in the price
  of related products can change demand.
• Ex. Butter vs. Margarine
• Population
• Consumer Expectations

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SUBSTITUTION EFFECT

• SUBSTITUTION EFFECT Change in quantity demanded
  for one product because of a change in the price
  of another product.
• Ex. Butter prices go up, so people will start
  buying more margarine (a substitute for butter)

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COMPLEMENTARY GOODS

• COMPLEMENTS related goods where use of one
  increases the use of the other. (CDs and CD
  players).
• EX - Lower price of CD players means higher
  demand for CD players and also higher demand for
  CDs.
• EX - Higher CD player prices cause less demand
  for CDs.