Demand ES: Make decisions after reflection and review

Where do prices come from?  In a market economy prices are set by DEMAND and SUPPLY. These are determined by two groups:  Consumers: the people who BUY goods and services  Producers – the people that provide goods and services

Demand – HW Review Demand: The amount of a good or service that people are willing and able to buy at various prices during a given time period.  Amount:  Willing to buy:  Able to buy  Price:

Demand Schedule: The list of the quantities of a good that one person will buy at various prices. Tyler’s Taco Demand Schedule PriceQuantity  Tyler’s Taco Demand Curve Quantity Price

Demand Curve: The relationship between the PRICE of a good and the QUANTITY buyers are willing and able to buy

Demand Shifters in the Market  Income – recession will decrease demand  The number of consumers – seasonal  Consumers tastes and preferences – they change. Example: Sushi  The price of substitute goods – burritos v. tacos

Law of Demand: As PRICE increases, QUANTITY demanded decreases – and vice versa.