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Transcript
Part I: Demand
What is Demand?
 When consumers are willing AND able to buy a
good/service at a particular price….
Blow-Pop Simulation
 From the blow-pop simulation, we see a relationship
between price and demand from the demand
SCHEDULE (table)….
 When Price decreased, the demand for the blow-pop’s
increased…..
 This is the Law of Demand!
Law of Demand
 There is an inverse relationship between the price of a
good/service and it’s demand….
 In other words, when Price increases, demand
decreases.
 When Price Decreases, Demand Increases.
Law of Demand – Demand CURVE
Terminology
 Change in Demand
(demand shift)
 Change in Quantity
Demanded (demand
movement)
What leads to a change in Demand or a change in
Quantity Demanded?

1.
2.
3.
4.
5.
Determinants of Demand – factors that shift/move a
demand curve
Change in Consumer Tastes
Change in the number of buyers
Change income
Change in prices of complements/substitutes
Change in consumer expectations
Law of Diminishing Marginal Utility
 For each unit of a good/service consumed (used), the
satisfaction for the next unit will decrease…..huh?
 Songs on a radio
 You can only listen to “Black and Yellow” so many
times before it gets “played out”
 Marshmallow simulation