DEMAND DEMAND The desire ability and willingness to
DEMAND
DEMAND �The desire, ability, and willingness to buy a product.
Law of Demand �Price and demand are inverse. �As price goes up = demand goes down �As price goes down = demand goes up
DEMAND SCHEDULE �A listing that shows corresponding prices and quantities demanded.
Mr. Lawson’s Demand Schedule for a Blu-Ray PRICE QUANTITY DEMANDED $50 $40 $30 $20 $10 $5 0 0 1 1 2 3
DEMAND CURVE �Demand schedule in graph form
Mr. Lawson’s Demand Curve for a Blu-Ray $50 $40 $30 $20 $10 $5 $0 0 1 2 3
Changes in Demand �Causes demand curve to SHIFT to the right or left.
Change in Demand $50 $40 $30 $20 $10 $5 $0 0 1 2 3
Causes for Change in Demand? �Consumer Income �Consumer Taste �Substitutes �Complements �Change in Expectations �Number of Consumers
Consumer Income �If consumer’s incomes increase they are able and willing to buy more products �If consumer’s incomes decrease they are less likely to buy products. �Ex. : When our unemployment rate is low, our economy strives.
Consumer Tastes �Advertising, news reports, fashion trends, and changes in the season have an affect on demand �Ex: In the month of October, people tend to buy items that are pink…
Substitutes �Products that can be used in place of other products. �Ex. : when the price of Coca-Cola goes up, the demand for Pepsi goes up.
Complements �An item that increases the use of another product. �Ex. : When the price of blu-ray players goes down, consumers buy more blu-ray players and blu-rays.
Change in Expectation � Change in what people expect in the future. � Ex. : the i. Phone 5 was announced in June. That caused the demand for i. Phone 4/4 s to go down. � Ex. : consumers might wait until Black Friday to buy a product they know will be on sale.
Number of Consumers �An increase in the number of consumers will change the demand for an item.
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