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4.1 The Demand Curve
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Demand
4.1 The Demand Curve
4.2 Elasticity of Demand
4.3 Changes in Demand
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
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CONSIDER
 Why are newspapers sold in vending machines that
allow you to take more than one copy?
 How much chocolate do you eat when you can eat all
you want?
 What cures spring fever?
 What economic principle is behind the saying, “Been
there, done that”?
 Why do higher cigarette taxes cut smoking by
teenagers more than by other age groups?
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
Objectives
 Explain the law of demand
 Interpret a demand schedule and
demand curve
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
Key Terms
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demand
law of demand
marginal utility
law of diminishing marginal utility
demand curve
quantity demanded
individual demand
market demand
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
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Demand
Demand indicates how much of a product
consumers are both willing and able to buy
at each possible price during a given
period, other things remaining constant.
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
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Law of Demand
The law of demand says that quantity
demanded varies inversely with price,
other things constant.
Thus, the higher the price, the smaller the
quantity demanded.
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
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Law of Demand
Demand, wants, and needs
Substitution effect
Income effect
Diminishing marginal utility
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
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Demand Schedule
and Demand Curve
Demand versus quantity demanded
Individual demand and market demand
CONTEMPORARY ECONOMICS
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4.1 The Demand Curve
SLIDE
Demand Schedule
and Demand Curve for Pizza
Price per
Pizza
9
Quantity
Demanded
per Week
(millions)
a
$15
8
b
12
14
c
9
20
d
6
26
e
3
32
Figure 4.1
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4.1 The Demand Curve
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Individual Demand for Pizzas
(a) Hector
(b) Brianna
(c) Chris
$12
$12
8
4
8
4
8
4
Price
$12
dH
1 2 3
Pizzas
(per week)
dB
1 2
dC
1
Figure 4.4
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4.1 The Demand Curve
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Market Demand for Pizzas
(d) Market demand for pizzas
dH + dB + dC = D
Price
$12
8
4
1 2 3
6
Pizzas
(per week)
Figure 4.4
CONTEMPORARY ECONOMICS
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