Objectives LESSON 4 3 Changes in Demand Identify

Objectives LESSON 4. 3 Changes in Demand Identify the determinants of demand, and explain how a change in each will affect the demand curve. Distinguish between the money price of a good and the time price of a good. 1 CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN

Key Terms LESSON 4. 3 Changes in Demand tastes movement along a given demand curve shift of a demand curve 2 CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN

Changes That Can Shift the Demand Curve Changes in consumer income Normal goods Inferior goods Changes in the prices of related goods Substitutes Complements Changes in the size or composition of the population Changes in consumer expectations Changes in consumer tastes 3 CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN

Movement Along a Demand Curve Versus a Shift of the Curve A change in price, other things constant, causes a movement along a demand curve, changing the quantity demanded. A change in one of the determinants of demand other than price causes a shift of a demand curve, changing demand. 4 CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN

An Increase in the Market Demand for Pizza $15 b Price per pizza 12 9 6 3 0 5 f 8 14 20 26 Millions of pizzas per week CONTEMPORARY ECONOMICS: LESSON 4. 3 D 32 D' © SOUTH-WESTERN

A Decrease in the Market Demand for Pizza $15 j b Price per pizza 12 9 6 3 0 6 8 14 20 D' D 26 32 Millions of pizzas per week CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN

Extensions of Demand Analysis Role of time in demand The cost of waiting in line 7 CONTEMPORARY ECONOMICS: LESSON 4. 3 © SOUTH-WESTERN