Title: Theory of demand  Subject: Economics  Author: Lai Yuen Ki, Anita  Target audience: Secondary 4 students  How the presentation is to be used:

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Presentation transcript:

Title: Theory of demand  Subject: Economics  Author: Lai Yuen Ki, Anita  Target audience: Secondary 4 students  How the presentation is to be used: lecture

Name: Lai Yuen Ki, Anita Student number: Course: EDD 5161F

Theory of Demand

Quantity demanded  The quantity of a good a person is willing and able to buy at a particular price in a period of time

Who eats more? I eat 10 fish a day I eat 10 fish a year

Factors affecting quantity demanded Price of the good Future price expectation Price of related goods Others: income, taste Qd

 Within a period of time, an increase (decrease) in price of a good results in a decrease (increase) in its quantity demanded, ceteris paribus. The Law of Demand

Price Quantity P1 Q1 P2 Q2

The Law of Demand Price Quantity P1 Q1 P2 Q2

The Law of Demand Price Quantity P1 Q1 P2 Q2

The Law of Demand Price Quantity P1 Q1 P2 Q2

Ceteris paribus Price of the good Future price expectation Price of related goods Others: income, taste Qd Other factors being constant

The Law of Demand Qd Price of the good Ceteris paribus

Is change in Qd the same as change in demand?

Change in quantity demanded  Caused by a change in a good’s price  Holding all other factors constant  A movement along the same demand curve

Change in quantity demanded Price Quantity P1 Q1 P2 Q2

Change in quantity demanded Price Quantity P1 Q1 P2 Q2

Change in quantity demanded Price Quantity P1 Q1 P2 Q2

Change in demand  Caused by a change in factors (e.g. income, taste etc) other than a good’s own price  A shift of the entire demand curve

Change in demand Price Quantity P1 Q1 P2 Q2

Revision  What is the law of demand?  What is the change in quantity demanded?  What is the change in demand?