1. Unit 3 SUPPLY AND DEMAND

2. Chapter 4 DEMAND

3.  To have demand for a product you must be WILLING and ABLE to purchase the product  WILLING + ABLE = DEMAND  LAW OF DEMAND  As the price of a product increases, consumers buy less of a product  As the price of a product decreases, consumers buying more of a product WHAT DOES DEMAND MEAN?

4.  Quantity Demanded is the amount of a good or service people are willing and able to buy at a particular PRICE other things being equal. (Graph)  Demand is the entire schedule. It represents the amount people are willing and able to buy at all price levels. (Graph) QUANTITY DEMANDED VS. DEMAND

6. An individual demand schedule is a table that lists the quantity of a good a person will buy at each different price. A market demand schedule is a table that lists the quantity of a good all consumers in a market will buy at each different price. THE DEMAND SCHEDULE

7.  A demand curve is a graphical representation of a demand schedule.  Three characteristics of every demand curve:  Downward sloping  Must assume ceteris paribus  Relationship between price and quantity  What is the one factor that causes a shift in the quantity demanded? THE DEMAND CURVE PRICE

8.  Movement along the demand curve is a result in a consumer changing their behavior based on a change in price.  Increase in quantity demanded is demonstrated by moving down the demand curve  Decrease in quantity demanded is demonstrated by moving up the demand curve MOVEMENT ALONG THE CURVE

9. SHIFTING THE WHOLE DEMAND CURVE Income Change in income affects demand. Normal vs. Inferior Goods Consumer Expectations of Future Price Anticipation of increase/decrease in future price will impact current demand. Population Change in population impacts the demand for most products. Consumer Taste and Advertising Consumer perception of products will impact demand. Price of Related Goods The demand curve for one good can be affected by a change in the demand for another good. Compliments vs. Substitutes These factors will change the entire demand schedule and shift the curve rightward or leftward.