IT LOOKS LIKE IT LookS LIKE 2 Curves 1 Curve 1 Price 2 PRICES Change in Demand CAUSE: Determinant (shifter) 1. tastes/preferences 2. price of related goods 3. consumer income 4. number of consumers 5. consumer expectations of future prices EFFECT: Shift in curves Change in Quantity Demanded CAUSE: Change in Price of the product EFFECT: movement along the curve IT LOOKS LIKE IT LookS LIKE 2 Curves 1 Curve 1 Price 2 PRICES

Steps to working with Demand graphs 1. Draw and label the graph 2 Steps to working with Demand graphs 1. Draw and label the graph 2. Identify the product that the graph corresponds to – difficult sometimes when two products are mentioned. 3. Pick a starting P and Q and draw the dotted lines.   Steps 1-3 should be done as a starting point   4. KEY: Ask the question – did the price of the product change? A. If yes --- then it is a “change in quantity demanded” Draw the new price and new quantity and leave the curve alone B. If no – then it is a “change in demand” Identify the shifter and appropriate increase or decrease (right or left) Draw a new curve and keep the price the same.