1.1.2 Understanding customer needs 28/11/2018 GCSE Business 1.1.2 Understanding customer needs

Start of lesson drills Planner on the desk Pen/stationary available 28/11/2018 Start of lesson drills Planner on the desk Pen/stationary available Exercise book open on the desk Date copied from the board No new title today Ready to learn Reminder

28/11/2018 Expectations Be in the right place, at the right time doing the right thing: Be respectful of others and allow them to learn Complete all homework tasks set and come to me if you have any problems completing it Respect all school equipment Bring the correct equipment (pens, books etc.) to our class Act as respectable young adults like business individuals Reminder

Demand learning objectives 28/11/2018 Demand learning objectives By end of the lesson, you should be able to: Describe demand Describe effective demand Calculate revenue from different demands Explain what a demand curve is showing

Demand recap What is Demand? What is Effective Demand 28/11/2018 Demand recap What is Demand? What is Effective Demand Name 5 things demand depends on What is repeat purchase? Demand The amount that an individual or individuals are willing to buy at any given price. For demand to be meaningful, it has to be backed up by the ability to pay. This is called effective demand.

Homework Don’t forget that I gave you a demand worksheet on Wednesday 28/11/2018 Homework Don’t forget that I gave you a demand worksheet on Wednesday What we will do today will help you answer the worksheet This is due on Monday 21st September P2

Starter https://www.youtube.com/watch?v=RP0j3Lnlazs 28/11/2018 Starter https://www.youtube.com/watch?v=RP0j3Lnlazs From 18 Seconds to 4 min 10 Seconds

Demand for Mars Bars in a school: 28/11/2018 Demand for Mars Bars in a school: Price Quantity Demanded Revenue £0.20 400 £80 £0.25 350 £87.50 £0.30 300 £90 £0.35 250 £0.40 200 £0.45 150 £67.50 £0.50 100 £50

This is what it looks like on a graph 28/11/2018 This is what it looks like on a graph

What does the graph show? 28/11/2018 What does the graph show? The demand curve is downward sloping because as the price of Mars bars increase, less people are prepared to pay the higher prices, so demand decreases. This company should therefore think carefully what price to sell their chocolate bars.

What is Supply? Supply - The amount of goods that producers are willing to supply / sell at a given price SUPPLY AND PRICE In virtually all cases supply increases as price increases and vice versa. This is because producers are aiming to make profit. If the good is sold at a high price they will make more profit. If it is sold at a low price they will either make very little profit or even a loss

Supply and Mars bars Price Quantity Supplied £0.20 100 £0.25 150 £0.30 200 £0.35 250 £0.40 300 £0.45 350 £0.50 400

This is what the Supply Graph looks like

What does the graph show us? The Supply curve is upward sloping (a positive correlation). This means that businesses want to supply their products at the highest possible price. This is so that it earns them the most amount of profit. BUT! Thinking back to our Demand curve customers want to pay the lowest price, so there has to be….

The Equilibrium Price equilibrium is found where supply and demand are equal. This is the point where both sellers and buyers are happy with the price and quantity.

How much are you prepared to pay for a Mars Bar? What affects your demand for the product?

Factors affecting demand 28/11/2018 Factors affecting demand https://www.youtube.com/watch?v=Enz6z9jGmsk 3min 14secs Make notes on the factors affecting demand

Activity – Demand poster 28/11/2018 Activity – Demand poster Create a poster to explain the factors which affect demand for your favourite product. They might include: The price The price of rival brands Fashion and taste How easy it is to find and buy How well promoted it is Whether there was a chance to trial the product There are more examples in your exercise book! You have 20 minutes

Plenary – Lets wrap up demand 28/11/2018 Plenary – Lets wrap up demand Demand street

Homework Don’t forget that I gave you a demand worksheet on Wednesday 28/11/2018 Homework Don’t forget that I gave you a demand worksheet on Wednesday This is due on Monday 21st September P2