Demand

Demand is the quantity of a commodity a consumer is willing and able to buy.

The law of demand As the price increases, the quantity demanded decreases, ceteris paribus. This also works in the opposite direction e.g. Price down quantity up

Ceteris paribus means everything else is held constant and only price is allowed to change. We know in reality you can’t do this but just pretend.

Demand Schedules This is a table that shows the quantity of a good or service a consumer is willing and able to buy at each price

TITLE: Lillie’s Demand for chips per week TITLE: Lillie’s Demand for chips per week Label: Price ($) Label: Quantity

TALL TitleAxisLabelsLine TALL helps us remember the key points to draw an accurate line graph.

Change in the Quantity Demanded Price is the only thing that will change the quantity demanded. A change in price moves you along the Demand curve. An increase in price causes a decrease in the Quantity demanded An decrease in price causes an increase in Quantity demanded Price and quantity move in opposite directions

LAW OF DEMAND P$P$ Q D As price decreases then quantity demanded increases or as price increases quantity demanded decreases, ceteris paribus.

Do this now 1.Construct a demand schedule based on the information above. Remember your labels 2.Identify the quantity Rena would demand at the current price of $ Explain why Rena’s quantity demanded of peanut slabs falls as the price rises D D

Movement along the demand curve We use the term quantity demanded when we are describing a change in price. This is illustrated by a movement along the demand curve. Go to workbooks page 28. Read the box up the top and begin exercises below. Price increases to 1.25 Show these effects Locate new quantities and prices Draw in arrows Label. Q1 p1 Q2 p2

Market Demand Is the total demand that all individual consumers in that market are willing and able to buy at various prices at a particular point in time How much the whole market will buy

Market Demand Schedules and Curves Found (derived) by adding horizontally, all the individual consumers demand schedules and curves. Demand Schedule for Cans of Soft Drink (weekly) Price ($)Rebecca Quantity Hilary Quantity Maree Quantity Market Quantity = = =5

Text Book page 24 Questions 1-5