Demand What is demand? What is demand? The desire, ability, and willingness to buy a product. The desire, ability, and willingness to buy a product. Law of demand-quantity demanded varies inversely with price. (Consumers demand less when the price is high.) Law of demand-quantity demanded varies inversely with price. (Consumers demand less when the price is high.) A microeconomics concept. A microeconomics concept. Deals with behavior and decision making by small units. Deals with behavior and decision making by small units.

Elastic v. Inelastic Term that indicates the extent to which changes in price cause changes in quantity demanded. Term that indicates the extent to which changes in price cause changes in quantity demanded. Elastic demand-CDs, steak, seafood. Elastic demand-CDs, steak, seafood. Inelastic demand-table salt, pepper, toilet paper. Inelastic demand-table salt, pepper, toilet paper.

Review If demand is elastic, when prices are lowered, consumers buy more. When prices are raised, consumers buy less. If demand is elastic, when prices are lowered, consumers buy more. When prices are raised, consumers buy less. If demand is inelastic, when prices are lowered, there is little change. If demand is inelastic, when prices are lowered, there is little change. Determinants of Demand Elasticity Determinants of Demand Elasticity Can the purchase be delayed? Can the purchase be delayed? Are Adequate Substitutes Available? Are Adequate Substitutes Available? Does the purchase use a large portion of income? Does the purchase use a large portion of income? Is the price going to change over time? Is the price going to change over time?

READ pages READ pages Do the Section one assessment 1,3,4,5 Do the Section one assessment 1,3,4,5 Do the Demand Curve Practice – use pages 90 – 92 for help. Do the Demand Curve Practice – use pages 90 – 92 for help. Study your Flashcards Study your Flashcards Vocab Quiz – Friday 2/6/15 Vocab Quiz – Friday 2/6/15