Demand Presented by Mattay Botcheff What Is Demand

Demand Presented by: Mattay Botcheff

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 good, the lower is the quantity demanded.

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

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

What Determines Buying Plans The price of the good

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

Population

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

Demand - Substitutes

Demand - Complements

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