Supply & Demand: Market Competition. Demand: the desire, ability, and willingness to buy a product.
CH 4: DEMAND 4-1: WHAT IS DEMAND? Notes#1. What is demand? Definition: demand is the willingness to...
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Transcript of CH 4: DEMAND 4-1: WHAT IS DEMAND? Notes#1. What is demand? Definition: demand is the willingness to...
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CH 4: DEMAND4-1: WHAT IS DEMAND?Notes#1
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What is demand?
Definition: demand is the willingness to buy a good or service and the ability to pay for it Must have both elements for
demand to exist
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Law of Demand
Definition: states that when prices go down, quantity demanded increases and that when prices go up, quantity demanded decreases
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Demand Schedule
Definition: a table (or listing) of how much of an item an individual is willing to purchase at each price
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Individual Demand Schedule
Price (per DVD) Quantity Demanded
30 025 120 215 310 45 7
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Individual Demand Schedule (continued)
What can we learn from an individual demand schedule? How much of an item one person is
willing and able to by at a specific price
On the previous slide I am not willing nor able to buy any DVDs at $30But, I am willing and able to buy 7
DVDs if they are $5 each
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Market Demand Schedule
Definition: a listing of how much of a good or service all consumers are willing to purchase at each price This shows the demand of all people
in a market who are willing and able to buy a good/service
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Market Demand Schedule (continued)
Purpose: Business owners need a market demand schedule in order to price a good to gain the maximum number of sales
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Sample Market Demand Schedule
Price (per DVD) Quantity Demanded30 5025 7520 10015 12510 1755 300
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Demand Curve
Definition: graphically shows the data from a demand schedule
Market Demand Curve Definition: graphically shows the data
from a market demand curveIndividual Demand Curve Definition?
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Draw an Individual Demand Curve
Use the data below to construct an individual demand curve for DVDs
Price (per DVD) Quantity Demanded
30 025 120 215 310 45 7
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Individual Demand Curve
Note: the vertical axis is always price and the horizontal axis is always quantity demanded (of a particular product)
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Applying What You Have Learned
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Vera Wang: Designer in Demand
Read P. 104 and answer question D.
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Questions
1. Why is it unlikely that most brides will have demand for an original Vera Wang gown?
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2. Explain why a demand curve slopes downward.
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3. Does quantity demanded always fall as price rises? WHY?
4. List 2-3 goods or services that you believe would remain in demand even if the price rose sharply.
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Create a demand schedule
5. Pizza King makes the best pizza in town. Create a demand schedule (below) showing how many pizza per month you would buy at the following prices: $25, $20, $15, $10, and $5. Make sure to label the schedule accurately.
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6. Graph your demand curve for pizza. Make sure to label your individual demand curve accurately.