1. Demand Essential Standards E.1.3, E.1.4 Ch 21

2. Consumers are people who buy products
They have a great influence on the price of goods and services.
If no one will buy it, it is not productive to make it
Sellers want to make the most money that they can.
Buyers want the product for as cheap as they can get it

3. Law of Demand
Changes in price will change consumer demand for that product
Demand can only occur if a buyer has desire, ability, and willingness to buy

4. Demand = Downward Slope When Price goes up, Demand goes down
When Price goes down, Demand goes up
Demand Schedules and Demand Curves

5. Price = independent variable Demand = dependent variable
Must change first to measure demand change
Demand = dependent variable
Will change only AFTER price changes
Practice demand curves on individual white boards

6. Determinants of Demand: characteristics that affect the amount people will buy
1. Population shifts
Consumers entering or leaving the market
What could make population change?
2. Consumer Expectations
If the price of an item is expected to rise next week, the demand for the item will rise today
Example: gas

7. 3. Preferences Can be due to products going out-of-date
Example: The demand for VCRs decreased as the preference for DVDs increased

8. 4. Substitutes 5. Compliments
Competing brands of products that can be used in place of each other
5. Compliments
Products that are used together
If price of one decreases, people will buy more. They also buy more of its compliment.
Example: hotdogs and hotdog buns

9. Product A & B
Product A and Product B are substitutes. The price of Product A goes up. What will happen to the demand for Product B?
Product A and Product B are compliments. The price of Product A goes down. What will happen to the demand for Product B?

10. Shifts in Demand
If demand Rises the demand curve will shift to the Right
If demand is Less, the demand curve will shift to the Left
Practice scenarios on white boards

11. Scenarios
Crime causes people to move out of a violent area. Show the change in demand in that area.
The price of stocks in the stock market are expected to increase next week. Show the change in demand for stocks today.

12. Boots become more fashionable than tennis shoes
Boots become more fashionable than tennis shoes. Show the change in demand for tennis shoes.
Kleenex brand tissues become more expensive. Show the change in demand for Puffs brand tissues
The price of shampoo goes up. Show the change in demand for conditioner.