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Demand WALT: Construct a demand schedule Consumers • A consumer is anyone who buys or uses goods or services • All of the consumers in your home make up a household Demand is the quantity of a good or service that a consumer is willing and able to purchase. The law of demand • As the price increases, the quantity demanded decreases, vice versa, ceteris paribus • Ceteris paribus means everything else is held constant and only price is allowed to change. We know in reality you can’t do this but just pretend. Demand Schedules • This is a table that shows the quantity of a good or service a consumer is willing and able to buy at each price • A demand schedule must have: • A title stating who the demand is for, in what time period and what good is being demanded. • Price ($) in the left hand column, going from lowest to highest • Quantity demanded in the right hand Demand Schedule Example TITLE: Lillie’s Demand for chips per week Price ($) Quantity Demanded 1 5 2 3 3 2 4 1 Workbooks pages 18-21 WALT: Construct a demand curve from a given schedule Demand Curve A curve that shows the quantity demanded of a product Lillies weekly demand for chips Price ($) 0 Quantity (Packets of chips) Lilly's Demand for Chips 6 Price ($) 5 4 3 2 1 0 1 2 3 Quantity 4 TALL • • • • Title Axis Labels Line • TALL helps us remember the key points to draw an accurate line graph. WALT: Show price changes on a demand curve Change in the Quantity Demanded • Price is the only thing that will change the quantity demanded. • A change in price moves you along the Demand curve. • An increase in price causes a decrease in the Quantity demanded • An decrease in price causes an increase in Quantity demanded • Price and quantity move in opposite directions LAW OF DEMAND As price decreases then quantity demanded increases or as price increases quantity demanded decreases, ceteris paribus. P $ D Q Powerade has increased from $1 to $2 - show the effects on your graph Requirements P2 P1 Q2 Q1 D – dotted lines A – Arrows (3) L – Labels (new and old price, new and old Quantity) Law of Demand • As price increases from $1 at P1 to $2 at P2, the quantity demanded decreased from 5 bottles per week at Q1 to 3 bottles per week at Q2. • This is because Powerade has become less affordable for Sam Workbooks • Exercises page 28-30
