Unit One: Supply and Demand

I. The Demand Curve Demand: the desire to own something AND ability to pay for it

I. The Demand Curve Law of Demand: consumers will buy more of a good when its price is lower and less when its price is higher

I. The Demand Curve Demand schedule: table that lists the quantity of a product that a consumer will purchase at different prices levels.

Change in Quantity Demand I. The Demand Curve Change in Quantity Demand Only price changes Movement along the curve Change in Demand Something other than price changes New shift in the demand curve Change in Quantity Demanded: change in the actual amount of a good or service consumers are willing and able to buy at some specific price. We assume Ceteris Paribus (all other things held constant) Change in Demand: a shift of the demand curve, which changes the quantity demanded at any given price.

II. Determinants of Demand Will either increase or decrease quantity demanded regardless of price

II. Determinants of Demand Changes in Income: Income affects our demand for products

II. Determinants of Demand Consumer Expectations: Expectations about the future can impact demand

II. Determinants of Demand Changes in Population: An increase in the amount of people leads to higher demand for a given product

II. Determinants of Demand Taste and Preferences: Cannot be totally explained, but demand for products shift depending upon the tastes of the population

II. Determinants of Demand Prices of Related Goods: Demand for one good can be effected by a change in demand for another good.