On a scratch piece of paper… EVERYONE answer these questions: You have just received $20 for your birthday. If I was selling Hershey Kisses, how many would (not could) you buy if they cost… $1.00 each? $0.50 each? $0.10 each?

Demand

Law of Demand As prices go up… …the quantity demanded goes down As prices go down… …the quantity demanded goes up Inverse relationship! A change in the price results in a change in the quantity demanded!

Demand Curve Illustrates the quantity of products demanded at certain prices Let’s graph it with our Hershey Kisses! Almost always curves down and to the right Why? When there is a change in the price, how do we find out what happens to the quantity demanded? Only a change in price can cause a change in the quantity demanded

Quick Review Demand curves almost always slant ___________ & to the _____________ According to the Law of Demand, as prices go up, the quantity demanded goes __________ According to the Law of Demand, as prices go down, the quantity demanded goes _________ What is the only thing that can change the quantity being demanded? down right down up The price of the product

Change in Demand Change in Demand: When people are wiling to buy different amounts of the product at the same prices The demand line shifts to the right (increase) or left (decrease)

Hershey Kiss Power! GOOD NEWS! Scientists have just discovered that Hershey Kisses have a special chemical inside of them that helps you be smarter and stronger each time you eat one! How many Hershey Kisses will you now buy if they are priced at: $1.00 each $0.50 each $0.10 each