Warm Up: Explain in your own words, in your Notebook: 1.Give one example of an elastic product and one example of an inelastic product. 2.What is the variable that affects the quantity we demand of a product?

(1) CONSUMER TASTE & PREFERENCES: Trends, fads, & advertising cause us to change our demand for a product. Jif has a successful advertising campaign, demand has _____________, curve shifts ____________. The Manning Brothers endorse Oreo Cookies; the demand for Oreos will _______________, curve shifts _______. INCREASED RIGHT INCREASERIGHT Factors that affect Demand

(2) SUBSTITUTES: The price of products that REPLACE one another can have an affect on the other’s demand  As JIF pb gets more expensive, the demand for Peter Pan pb will _____________, and the curve shifts ______________.  Since Butter is linked to an unhealthy diet, the demand for margarine will _____________, and the curve shifts _____________. INCREASE RIGHT INCREASE RIGHT Factors that affect Demand

(3) COMPLEMENTS Demand for products that GO TOGETHER can be affected if its CORRESPONDING product is changed. When peanut butter prices increase, the demand for jelly will _____________, curve shifts ______________. As razor blade handles go on sale, the demand for razor blades will ______________, curve shifts ____________. DECREASE LEFT INCREASE RIGHT Factors that affect Demand

(4) CHANGES IN EXPECTATIONS The FUTURE PRICE or AVAILABILITY of a good affects our demand for the product today. Peanut crop harvest affected by grasshoppers this season, demand will ______________, curve shifts _____________. Harry Potter video, blu-ray, dvd’s shelf life will be ended by December 29 th demand will _______________, curve shifts ___________. INCREASE RIGHT INCREASE RIGHT

Factors that affect Demand (5) CONSUMER INCOME: Changes in HOW MUCH MONEY a person has to SPEND can affect demand for a product Ex) Raise = Increase demand shift right Layoff = Decrease demand shift left (6) NUMBER OF CONSUMERS: A change in the SUM of ALL CONSUMERS (Market Demand) will shift the demand curve. Ex. Population increase= shift right More kids with allergies to Peanuts demand for PB DECREASE= shift left

Warm Up: What are the six factors that affect demand and give an example of one

DEMAND SHIFT RULES When demand for a product INCREASES, the entire curve shifts ______________. When demand for a product DECREASES, the entire curve shifts _______________. RIGHT LEFT

Demand Scenarios For each of the following scenarios you will have to explain what will happen to demand and also illustrate a graph that shows what happened to demand. Price Quantity D All graphs will start like this and you will have to: 1.Read scenario and identify either an increase or decrease. 2.Determine which reason caused the change. 3.Write a sentence explaining and show a new demand curve.

Scenario To share even more profits, McDonalds reduces the price of its dollar menu to a 50 cent menu. How will this affect the demand of Burger King’s food? Price Quantity D 1.Read scenario and identify either an increase or decrease. 2.Determine which reason caused the change. 3.Write a sentence explaining and show a new demand curve. Demand for ____________ will ______________ due to ________________; therefore the curve will shift _______________. DECREASE Substitutes LEFT D1D1 Burger King

Scenario More and more Americans are losing money in the stock market. How will this affect their over all demand for goods and services? Price Quantity D 1.Read scenario and identify either an increase or decrease. 2.Determine which reason caused the change. 3.Write a sentence explaining and show a new demand curve. Demand for GOODS & Services will ______________ due to ________________; therefore the curve will shift _______________. DECREASE Cons. Income LEFT D1D1

Scenario Derek Jeter successfully endorses GM cars, what should happen to demand for GM cars? Explain. Price Quantity D 1.Read scenario and identify either an increase or decrease. 2.Determine which reason caused the change. 3.Write a sentence explaining and show a new demand curve. Demand ________________ will ______________ due to ________________; therefore the curve will shift _______________. INCREASE Cons. Tastes RIGHT D1D1 GM CARS

Scenarios PRACTICE MAKES PERFECT!