1. Demand

2. Law of Demand has an INVERSE relationship
A Demand Curve
Law of Demand As Price goes Up, Quantity Demand goes down. As price goes down, quantity demand goes up
$100 A
$75
Law of Demand has an INVERSE relationship
Price B
$45
300
220
Quantity

3. Determinants of Demand (TIMER)
FACTORS THAT SHIFT THE DEMAND CURVE
Change in consumer tastes
Change in consumer incomes
Change in the number of buyers (Market Size)
Change in consumer expectations
Change in the prices of complementary
and substitute goods (related goods)

4. Consumer Taste
If you like something more, you will buy more of it, meaning DEMAND WILL INCREASE.

5. Consumer Taste
2. If you like something less, you will buy less of it, meaning DEMAND WILL DECREASE.

6. Examples of things that can change consumer taste
Product can cause harm or benefits
Cigarettes cause cancer
Bananas prevent prostate cancer
Product is no longer fashionable or becomes fashionalbe
FUBU
Jordans

7. Change in Income
1. The more money you make, the more money you have to spend, so you can DEMAND MORE normal goods.

8. Change in Income
2. The less money you make, the less money you have to spend, so you have to DEMAND LESS normal goods, but DEMAND MORE INFERIOR GOODS

9. Examples of things that can change income
I will get a promotion in the future
The minimum wage is raised
I get fired

10. Change in Market Size
1. The larger the population of the market, THE HIGHER THE DEMAND for all goods.

11. Change in Market Size
2. The smaller the population of the market, THE LOWER THE DEMAND for all goods.

12. Examples of things that can change market size
There is a baby boom
The Zombie Apocalypse happens
New suburban houses are created

13. Change in Expectations
1. If you think your income will rise in the future, you will DEMAND MORE. If you think your income will decrease in the future, you will DEMAND LESS.
2. If you think the price will rise in the future, you will DEMAND MORE NOW to save money later. If you think the price will decrease in the future, you will DEMAND LESS NOW
3. If you think a good/service will be less available in the future, you will DEMAND MORE NOW, so you can get it. If you think a good/service will be more in the future, you will DEMAND LESS NOW, because it won’t be as rare, and will most likely cost less.

14. Substitute Goods
Substitute Products are goods you can use to replace another good (the original).
If the price of the original good goes up, you will DEMAND MORE of the substitute.
If the price of the original good goes down, you will DEMAND LESS of the substitute.
Examples: If Pepsi Price goes up, demand for Coke goes up
If the price of butter goes up, the demand for margarine goes up.
If the price of Lays chips goes down, the demand for Dorito chips goes down
If the price of Firestone tires goes down, the demand for Michelin tires goes down.

15. Complimentary Goods
Complimentary products are goods that work along with another good (the original).
If the price of the of the original good goes up, you will DEMAND LESS of the complementary good.
If the price of the original good goes down, you will DEMAND MORE of the complementary good.
If the price of gasoline goes up, the demand of cars goes down
If the price of iPhone goes up, the demand for iPhone cases will go down.
If the price of computers goes down, the demand for computer mouse will go up.