2. CONSUMERS ANDDEMAND

3. I. THE LAW OF DEMAND A.Demand: The amount of a good or service that consumers are willing and able to buy at different prices

4. THE LAW OF DEMAND B.Law of demand: The economic law which states that consumers will buy more of a good or service as the price goes down

5. THE LAW OF DEMAND C.Demand is partially set by the price of a good or service D.Willing and Able are more/as important in setting the price

6. THE LAW OF DEMAND 1.Willing: Does the consumer want to buy the good or service? 2.Able: Does the consumer have the money to buy the good or service?

7. II. GRAPHING A.Graph: A diagram that shows the relationship between two or more sets of things

8. B.Demand Curve: The line on a graph that represents the amount of a good or service that consumers will buy at different prices GRAPHING

9. C.B.P.M.S. “T” shirts sale: 1.At $10 each, how many will be sold? 2.At $20 each…? 3.At $30 each…? GRAPHING

10. D.QUESTIONS: 1.At which price were the most people willing to buy? 2.At which price were the fewest people willing to buy 3.At which price would the school make the most money? GRAPHING

11. III. WHAT CAN CHANGE DEMAND? A.Likes and dislikes change from time- to-time 1.Fashions 2.Electronics 3.Musical Instruments

12. IV. HOW INCOME AFFECTS DEMAND A.Income: The amount of money that a person makes in a certain period of time. B.If consumer’s income decreases, they cannot or will not buy certain goods…price goes down C.If consumer’s income increases, they will buy more goods…price will go up

13. V. HOW SUBSTITUTE GOODS AFFECT PRICES A.Substitute goods: Goods that can take the place of one another 1.Butter…margarine 2.Hair spray…hair gel

14. VI. COMPLEMENTARY GOODS A.Complementary goods: Goods that are used with each other. 1.Tires for a car 2.CDs for a CD player 3.Ink cartridge for a printer B.As the price of a complementary good goes up, the demand for the original good goes down.

15. Reach For A Star Productions John P. Luke www.mrluke.net