Demand Presented by Mattay Botcheff What Is Demand

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Demand Presented by: Mattay Botcheff

Demand Presented by: Mattay Botcheff

What Is Demand? Demand - the entire relationship of the quantity demanded of a

What Is Demand? Demand - the entire relationship of the quantity demanded of a good and its price. Quantity Demanded - the quantity demanded of a good or service is the amount that consumers plan to buy in a given period of time at a particular price. Demands vs. Wants are unlimited wishes that people have. Because of scarcity, most of our wants will remain unsatisfied. Demand reflects a decision about which wants to satisfy.

The Law of Demand Other things being equal, the higher the price of a

The Law of Demand Other things being equal, the higher the price of a good, the lower is the quantity demanded.

Demand Schedule & Demand Curve Demand Schedule – lists the quantities demanded at each

Demand Schedule & Demand Curve Demand Schedule – lists the quantities demanded at each different price when all other influences on consumers’ planned purchases are held constant. Demand Curve – graphs the relationship between the quantity demanded of a good and its price when all other influences on consumers’ planned purchases are held constant.

Demand Curve

Demand Curve

Movement along the Demand Curve vs. a Shift in the Curve Movement along the

Movement along the Demand Curve vs. a Shift in the Curve Movement along the Demand Curve If the price of a good changes but everything else remains the same, there is a movement along the demand curve. A Shift in the Curve If the price of a good remains constant but some other influence on buyers’ plans changes, there is a change in the demand for that good.

Shift in the Demand Curve

Shift in the Demand Curve

What Determines Buying Plans The price of the good

What Determines Buying Plans The price of the good

 The prices of related goods Substitutes – used in place of another good

The prices of related goods Substitutes – used in place of another good Complements – used in conjunction with another good

 Population

Population

Other Determinants of Demand Income – higher income leads to higher consumption Expected future

Other Determinants of Demand Income – higher income leads to higher consumption Expected future prices – if prices are expected to rise, demand increases right away

 Preferences individual’s attitudes toward goods and services cannot be observed directly

Preferences individual’s attitudes toward goods and services cannot be observed directly

Demand - Substitutes

Demand - Substitutes

Demand - Complements

Demand - Complements

Source: Macroeconomics by Michael Parkin More Resources: For current Economics issues related to our

Source: Macroeconomics by Michael Parkin More Resources: For current Economics issues related to our course, please visit: https: //twitter. com/Matt. Botcheff/