Download Demand PPT 1

• This saying will be used for 4 different
definitions. All you will have to do is fill in the
blanks!!
• THE AMOUNT OF A GOOD OR SERVICE THAT
___1____ ARE WILLING TO ____2_____AT
_____3______ PRICE(S)
• 1)CONSUMERS OR PRODUCERS
• 2) BUY OR PRODUCE
• 3) EACH SPECIFIC (PRICE) OR VARIOUS(PRICES)
AND THAT IS IMPORTANT BECAUSE????
• You will have to be able to identify each of
those 4 definitions on a graph.
– It could be a DIVING LINE, A SOARING LINE, OR
JUST A DOT
OR THIS
Like this
Dot or Line? Demand or supply?
• REMEMBER THIS????
THE AMOUNT OF A GOOD OR SERVICE THAT
___1__ ARE WILLING AND ABLE TO ____2_____AT
___3__ PRICE(S)
1) CONSUMERS OR PRODUCERS
2) BUY OR PRODUCE
3) EACH SPECIFIC (PRICE) OR VARIOUS(PRICES)
The amount of a good or service that
consumers are willing and able to buy
at
price .
This is represented by the line.
various
s
Quantity Demanded
• The amount of a good or service that
consumers are willing and able to buy at
Each Specific price.
• The Dot on The Graph
Law of Demand
• Consumers are willing
to buy more at lower
prices than higher
prices.
• The relationship
between price and
quantity demanded
is INVERSE
(opposite).
Things that affect the law of demand:
• Income effect: When consumers have more money
they are willing to buy more.
• Substitution effect: The tendency of consumers to
replace a higher priced products with similar, cheaper
products. Example: Why buy a can of Pepsi when the
price of a can of Coke is cheaper
• Law of diminishing marginal utility: As consumers
consume more of a product, each additional unit
becomes less satisfying.
Example: When eating pancakes, is there a point
where you get sick of them????
Difference Between Quantity
Demanded and Demand
Quantity
Demanded is
the dot on the
graph.
Demand is the
entire line
linking all the
dots.
Plotting Demand
• The Dots (10,5) (20,3.75)
And (40,2) are Quantities
Demanded. (Points)
• The entire line connects all
Quantities Demanded and
Represents Demand.
Demand vs. Quantity Demanded
Demand or Quantity
Demanded
What
does
it
look
like?
Price
Demand or Quantity
Demanded?
Price (P)
P1
P2
D1
Quantity
(Q)
D2
D
Q1 Q2 Quantity
Demand Schedule for Apples
Price per
apple
Quantity
Demanded
$4
20,000
$3
40,000
$2
60,000
$1
80,000