Price

P

Quantity Demanded

Qd

$9 2

8 3

7 5

6 9

Price

P

Quantity Demanded

Qd

$9 2

8 3

7 5

6 9P

Q

9

2

8

3

7

5

6

9

D

Qd just a point on thecurve.

is the entirecurve.

To be on thedemand curvea person mustbe WILLINGand ABLE topurchase theproduct or service.

Price

P

Quantity Demanded

Qd

$9 2

8 3

7 5

6 9P

Q

9

2

8

3

7

5

6

9

D

Qd just a point on thecurve.

is the entirecurve.

There is an___________relationshipbetween priceand quantity.

inverse

Q

9

2

8

3

7

5

6

9

D

Quantity demanded--it is the amount that will be purchased at a specific P.

Definitions:

Demand--it is a schedule of quantities of goods and services that will be purchased at various prices at a specified time, all other things held constant.

Q

9

2

8

3

7

5

6

9

D

Q

9

2

8

3

7

5

6

9

D

Qd just a point on thecurve.

is the entirecurve.

Price changes Quantity Demanded

Price DOES NOT CHANGEDEMAND!!!!!!!!

Only one variable Qd

PRICE

PRICE DOES NOTDEMAND!!

GUESS HOW MANY DETERMINANTS OFDEMAND THERE ARE?

8And if you don’t memorize these variables, YOUWILL FAIL THIS CLASS!!

ARE THERE ANY QUESTIONS?

Eight Determinants of Demand:1. # of consumers

6$36.95

Eight Determinants of Demand:1. # of consumers2. Income--Normal Goods

3. Income--Inferior Goods

As people’s incomes go up demand fornormal goods increases. As people’s incomego down, demand for normal goods decrease.

As people’s incomes go up demand forinferior goods decreases. As people’s incomego down, demand for inferior goods increases.

______Used Furniture Store ______Lazy Boy Store

$25

Eight Determinants of Demand:1. # of consumers2. Income--Normal Goods

3. Income--Inferior Goods

4. Preferences

Eight Determinants of Demand:1. # of consumers2. Income--Normal Goods

3. Income--Inferior Goods

4. Preferences5. Price of related products: Substitutes

Eight Determinants of Demand:1. # of consumers2. Income--Normal Goods

3. Income--Inferior Goods

4. Preferences5. Price of related products: Substitutes6. Price of related products: Complements

Eight variables that shift Demand:1. # of consumers2. Income--Normal Goods

3. Income--Inferior Goods

4. Preferences5. Price of related products: Substitutes6. Price of related products: Complements7. Expected future P’s by consumers8. Expected future Y by consumers

Q

S

Quantity supplied--it is the amount that will be sold at a specific P.

Definitions:

Supply--it is a schedule of quantities of goods and services that will be sold at various prices at a specified time, all other things held constant.

P

GUESS HOW MANY DETERMINANTS OF SUPPLY THERE ARE?

5And if you don’t memorize these variables, YOUWILL FAIL THIS CLASS!!

ARE THERE ANY QUESTIONS?

Five determinants of Supply:1. # of suppliers2. Costs

3. Physical Availability of Resources

4. Technology5. Expected Future Prices by Consumer