CONSUMERSCONSUMERS

ANDANDDEMANDDEMAND

I. THE LAW OF I. THE LAW OF DEMANDDEMAND

A.A. Demand: The Demand: The amount of a amount of a good or good or serviceservice that that consumers are consumers are willing and ablewilling and able to to buybuy at different at different pricesprices

THE LAW OF THE LAW OF DEMANDDEMAND

B.B. Law of demand: The Law of demand: The economic laweconomic law which which states that consumers states that consumers will buy morewill buy more of a of a good or service as the good or service as the price goes downprice goes down

THE LAW OF THE LAW OF DEMANDDEMAND

C.C. DemandDemand is partially is partially set by the priceset by the price of a of a good or servicegood or service

D.D. Willing and AbleWilling and Able are more/as are more/as importantimportant in setting in setting the pricethe price

THE LAW OF THE LAW OF DEMANDDEMAND

1.1. Willing: Does the Willing: Does the consumer consumer want to buywant to buy the good or service?the good or service?

2.2. Able: Does the Able: Does the consumer consumer have the have the moneymoney to buy the good to buy the good or service?or service?

II. GRAPHINGII. GRAPHING

A.A. Graph: A Graph: A diagramdiagram that shows the that shows the relationshiprelationship between two or between two or more more sets of thingssets of things

B.B. Demand CurveDemand Curve: The : The line on a graphline on a graph that that represents the amount represents the amount of a of a good or servicegood or service that consumers that consumers will will buybuy at different prices at different prices

GRAPHINGGRAPHING

C.C. B.P.M.S. “T” B.P.M.S. “T” shirts sale:shirts sale:

1.1. At $10 each, how At $10 each, how many will be sold?many will be sold?

2.2. At $20 each…?At $20 each…?

3.3. At $30 each…?At $30 each…?

GRAPHINGGRAPHING

D.D. QUESTIONS:QUESTIONS:1.1. At which price were At which price were

the the most people most people willingwilling to buy? to buy?

2.2. At which price were At which price were the the fewest people fewest people willingwilling to buy to buy

3.3. At which price would At which price would the school make the the school make the most moneymost money??

GRAPHINGGRAPHING

III. WHAT CAN CHANGE III. WHAT CAN CHANGE DEMAND?DEMAND?

A.A. Likes and Likes and dislikes dislikes changechange from time- from time-to-timeto-time

1.1. FashionsFashions

2.2. ElectronicsElectronics

3.3. MusicalMusical Instruments Instruments

IV. HOW INCOME AFFECTS IV. HOW INCOME AFFECTS DEMANDDEMAND

A.A. Income: The amount of Income: The amount of money money that that a person makesa person makes in a in a certain period of time.certain period of time.

B.B. If consumer’s income If consumer’s income decreasesdecreases, they cannot or will , they cannot or will not buynot buy certain goods…price certain goods…price goes downgoes down

C.C. If consumer’s income If consumer’s income increasesincreases, , they will they will buy morebuy more goods…price goods…price will go upwill go up

V. HOW SUBSTITUTE V. HOW SUBSTITUTE GOODS AFFECT PRICESGOODS AFFECT PRICESA.A. Substitute goods: Substitute goods:

GoodsGoods that can that can take the placetake the place of of one anotherone another1.1. ButterButter…margarine…margarine

2.2. Hair spray…Hair spray…hair gelhair gel

VI. COMPLEMENTARY VI. COMPLEMENTARY GOODSGOODS

A.A. Complementary goods: Goods Complementary goods: Goods that are that are used with each otherused with each other..

1.1. TiresTires for a car for a car

2.2. CDs for a CDs for a CDCD player player

3.3. Ink cartridge for a Ink cartridge for a printerprinter

B.B. As the As the priceprice of a of a complementary good complementary good goes upgoes up, , the the demanddemand for the original for the original good good goes downgoes down..

Reach For A Star ProductionsReach For A Star ProductionsJohn P. LukeJohn P. Lukewww.mrluke.netwww.mrluke.net