2. Does Mr. Bull have demand for…?:
Definition: The various quantities of a good or service that someone is WILLING and ABLE to buy at DIFFERENT PRICES at a PARTICULAR TIME
WILLING and ABLE
Does Mr. Bull have demand for…?:

3. YES!

4. NO!!!

5. NO!

6. Individual Demand vs. Market Demand
I may not have demand for a porsche, but others do…
Market Demand – Sum of all individual’s demand

7. Grade Upgrade Certificates
Demand Schedule
Grade Upgrade Certificates

8. Graphing Demand
Demand Schedule Demand Curve

9. Law of Demand
As Price increases, Quantity Demanded decreases
As Price decreases, Quantity Demanded increases
As P↑, Qd↓
As P↓, Qd↑

10. Why does the Law of Demand occur?
The law of demand is the result of three separate behavior patterns that overlap:
The Income effect
The Substitution effect
The Law of Diminishing Marginal Utility
We will define and explain each…
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ACDC Leadership 2015

11. Change in Quantity Demanded
Income Effect
If price goes down, purchasing power goes up and vice versa
Substitution Effect
Pepsi vs. Coke

12. Nature of Demand Curve Diminishing marginal utility
What would compel you to buy additional JBCs?

13. Can you see the Law of Diminishing Marginal Utility in Disneyland’s pricing strategy?

14. 2010 Question 36 D
Copyright
ACDC Leadership 2015

15. Read pgs. 54-59 and complete Demand worksheet
Homework
Read pgs and complete Demand worksheet

16. Change in Quantity Demanded

17. Individual Demand Demand Can Increase or Decrease Individual Demand P6 5 4 3 2 1
Individual
Demand P Qd
Increase in Demand $5 4 3 2 1 10 20 35 55 80
Price (per bushel) D2
Decrease in Demand D1 D3 Q
Quantity Demanded (bushels per week)
3-17

18. Change in Quantity Demanded
Individual Demand
Demand Can Increase or Decrease P 6 5 4 3 2 1
Change in Demand
Individual
Demand P Qd
Change in Quantity Demanded $5 4 3 2 1 10 20 35 55 80
Price (per bushel) D2
Decrease in Demand D1 D3 Q
Quantity Demanded (bushels per week)
3-18

19. Change in Demand Change in Income mo’ money = mo’ problems purchases
normal vs. inferior
Change in Prices and Availability of Substitutes
ex: Pens and Pencils
Change in Prices and Availability of Complements
ex: Paper and Pencils
Change in Weather or Seasons
ex: Shorts in winter, Sleds in summer, Gas?
Change in Number of Buyers
ex: larger/smaller market, population change, technology
Change in Styles, Tastes, Habits, Preferences
fashion, coolness, trends – ex:
Change in Expectations
future oriented – ex: harvest, technology

20. Practice Check HW Work through the worksheet
Homework: Read pgs and complete Supply worksheet