Demand

Quantity of a product that buyers are willing and able to purchase at any and all prices Consumers are interested in receiving the most satisfaction for their money, which is limited

Quantity Demanded Inverse relationship between price and quantity demanded As prices decrease, quantity demanded increases (consumers are willing to buy MORE units of a good or service) As prices increase, quantity demanded decreases (consumers tend to buy LESS units of a good or service) PRICE causes a change in the number of units consumers wish to purchase Demand curve is downward sloping

Quantity Supplied Positive relationship between price and quantity supplied Quantity of a product that producers are willing and able to sell at any and all prices Sellers are interested in making a profit – 1. How much it will cost to produce? – 2. How much can the good/service be sold for? Supply curve is an upward sloping line

Equilibrium Market clearing price Supply and demand intersect – Most sellers are willing to sell at this point – Most buyers are willing to buy at this point A price above equilibrium causes a surplus (lower price) A price below equilibrium causes a shortage (increase price)

Determinants of demand 1.Tastes and Preferences 2.Number of buyers 3.Expectations 4.Price of related goods (substitutes and complements) 5.Income These factors will cause your demand curve to SHIFT. A shift to the right (increase); A shift to the left (decrease)

What will happen to demand? 1.The demand for cars when people get a tax refund 2.The demand for gloves after the first snow storm 3.The demand for hot dogs when the price of hot dog buns rises 4.The demand for gasoline today when people expect prices to fall tomorrow 5.The demand for ice cream when the price of ice cream drops

Graph the demand for candy!