1 DEMAND SUPPLY DEMAND SUPPLY 2 Demand It

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1 DEMAND SUPPLY

1 DEMAND SUPPLY

DEMAND SUPPLY 2 Demand “It is the quantities of a product that consumers are

DEMAND SUPPLY 2 Demand “It is the quantities of a product that consumers are willing and able to buy at various prices period of time ceteris paribus” Tutorial Notes

DEMAND SUPPLY 3 Demand 1. 2. 3. You are hungry. There are many hungry

DEMAND SUPPLY 3 Demand 1. 2. 3. You are hungry. There are many hungry people in Singapore. You want food! They want food!! Q 1. How much will you pay for 1 st hamburger to ensure that you get what you want ($1, $2, $3) (note: think “competition ”)

DEMAND SUPPLY 4 Demand Your Hamburger Demand Curve Change in quantity demanded owing to

DEMAND SUPPLY 4 Demand Your Hamburger Demand Curve Change in quantity demanded owing to changes in price Price Mo ve 3 me nt alo ng Price decreases th e. D D 2 cu rv e 1 D 10 20 Qty demanded increases 30 Quantity

DEMAND SUPPLY 5 Demand Individual Hamburger Demand Curves Price P Quantity Q Hamburger Industry

DEMAND SUPPLY 5 Demand Individual Hamburger Demand Curves Price P Quantity Q Hamburger Industry Demand Curve

DEMAND SUPPLY Change in Quantity Demanded vs Change in Demand 6 Demand Q 2.

DEMAND SUPPLY Change in Quantity Demanded vs Change in Demand 6 Demand Q 2. What affects demand? Q 1. What affects quantity demanded? Change in price of product P P Non-price factors eg. income, population, weather, taste and preference, price of related goods etc. P 1 P 2 D 1 D Q 1 Q 2 D 2 Q Q 2 D 0 Q 1 Q

DEMAND SUPPLY 7 Demand In your groups, discuss how the following will influence demand

DEMAND SUPPLY 7 Demand In your groups, discuss how the following will influence demand for crude oil: (demand for crude oil and not quantity demanded for crude oil) • Change in weather pattern • Change in government legislation • Change in population size • Change in the price of a related product to crude oil • Change in taste and preference • Change in consumer expectation • Change in income.