1. What consumers are willing to pay for goods and services

2. Law of Demand The lower the price, the more consumers want to buy

3. Things that affect the law of demand: Income effect: the more you have the more you spend Substitution effect: if you can get a similar, substitute good that is cheaper.. You will Law of diminishing marginal utility: sometimes you get tired of a particular good and stop buying it

4. Quantity Demanded The exact amount consumers want at a certain price

5. Plotting Demand

6. Demand vs. Quantity Demanded DemandQuantity Demanded What does it look like? Price (P) Quantity D Price Quantity (Q) D1 P1 Q1 P2 Q2 D2

7. DEMAND THE WHOLE CURVE QUANTITY DEMANDED EACH DOT In other words…

8. NOW… you plot some Demand Schedule for Hair Dryers Price per Hair Dryer Quantity Demanded $400 $3020 $2040 $1060

9. Demand Schedule for Apples Price per apple Quantity Demanded $420,000 $340,000 $260,000 $180,000

10. Demand Schedule for Shoes Price of Shoes Quantity Demanded $15060 $120120 $90150 $60180 $30210

11. Demand Schedule for Apples Price per apple Quantity Demanded $420,000 $340,000 $260,000 $180,000

12. Demand Schedule for Car Stereos Price per stereo Quantity Demanded $500500 $4001000 $3001500 $2002500 $1005000