Goal 8 demand and changes
-
Upload
mrs-sharbs -
Category
Documents
-
view
654 -
download
2
Transcript of Goal 8 demand and changes
![Page 1: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/1.jpg)
Laws of Demand
Goal 8
![Page 2: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/2.jpg)
Discuss
What is a market? In a market who is the
consumer? How does the price of a
good affect the consumer?
![Page 3: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/3.jpg)
Market
An arrangement that allows buyers and sellers to exchange things
Markets exist because no one is self sufficient and no one produces all we require to satisfy all our needs and wants.
![Page 4: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/4.jpg)
Demand
Description› The quantities of a particular good or service consumers are willing and able to buy at different possible prices at a particular time
![Page 5: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/5.jpg)
Demand Illustration p.1 sec. 1
Price
Quantity
As price goes up, quantity goes down
D1
![Page 6: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/6.jpg)
Discuss
How does demand and “want” or “desire” differ?
You may want or desire a new car or a closet full of clothes, but you demand these things only when you are willing and able to buy them.
![Page 7: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/7.jpg)
Quantity Demand
The quantities of a particular good or service consumers are willing and able to buy at set prices at a particular time
![Page 8: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/8.jpg)
Quantity Demand Illustration
D2
Price
Quantity
![Page 9: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/9.jpg)
Demand Schedule
How much people are going to buy at the various prices.
Ex. The price of pizza
Price Quantity
$.50
$1.00
$1.50
$2.00
$2.50
![Page 10: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/10.jpg)
Law of Demand
As price goes up quantity goes down
As price goes down quantity goes up
People buy less of something at higher prices than they do at lower prices.
![Page 11: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/11.jpg)
ELASTIC DEMAND: demand that is very sensitive to a
change in price goods that one might stop buying
or cut back on as price increased (SUVs, Luxury items)**on a graph this demand curve will be FLAT
![Page 12: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/12.jpg)
INELASTIC DEMAND
demand that is not very sensitive to a change in price
goods that you would buy at any price; there are few if any substitutes for these goods.
(milk, gas, prescription drugs) **on a graph this demand curve would be very steep.
![Page 13: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/13.jpg)
Illustration of Decrease and Increase in Demand Decrease in Price Increase in Price
Price
Quantity
D1 D2
Quantity
Price
D1D2
The less you buy the more you will move to the left!
![Page 14: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/14.jpg)
The Demand Curve
The Demand Curve slopes downward to the right because the consumer is willing and able to buy more gasoline at lower prices than at higher prices.
![Page 15: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/15.jpg)
Scenario #1
Harris Teeter is advertising a sale on hot dog buns. What is the impact on the demand for hot dogs?
![Page 16: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/16.jpg)
Scenario #2
Playstation 3, the newest video game console, hits stores. What is the impact on the demand for Xbox 360?
![Page 17: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/17.jpg)
Scenario #3
The weatherman forecasts rain for the weekend in Charlotte. What is the impact on the demand for umbrellas?
![Page 18: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/18.jpg)
Scenario #4
The N.C. General Assembly increases minimum wage to $7/hour. What is the impact on the demand for clothing?
![Page 19: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/19.jpg)
Scenario #5
A snowy blizzard blows through Charlotte. What is the impact on the demand for snow boots?
![Page 20: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/20.jpg)
Scenario #6
The price of MP3 players decreases dramatically due to new technology. What is the impact on the demand for portable CD players?
![Page 21: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/21.jpg)
Scenario #7
Summertime is approaching. What is the impact on the demand for shorts?
![Page 22: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/22.jpg)
Scenario #8
The price of hamburgers increases at Food Lion. What is the impact on the demand for French fries?
![Page 23: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/23.jpg)
Changes in Demand
![Page 24: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/24.jpg)
Reasons Demand can change
People’s Income Weather Complementary Goods Substitute Goods
![Page 25: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/25.jpg)
What is a Complementary Good?
Complementary Good: Two goods that are usually consumed together (Hot Dogs & buns)
![Page 26: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/26.jpg)
What is a Substitute Good?
Substitute Good: An acceptable replacement for a good (Playstation & Xbox)
![Page 27: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/27.jpg)
People’s Income Increases
Effect on Demand
Demand Increases› (shift right)
P
Q
D1 D2
![Page 28: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/28.jpg)
Bad Weather (for product)
Effect on Demand
Demand Decreases› (shift left)
P
Q
D1D2
![Page 29: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/29.jpg)
Price of Complementary Good Decreases (ex: peanut butter & jelly)
Effect on Demand
Demand Increases› (shift right)
P
Q
D1 D2
Peanut Butter
![Page 30: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/30.jpg)
Price of Substitute Good Decreases (ex: Pepsi & Coca-Cola)
Effect on Demand
Demand Decreases› (shift left)
P
Q
D1D2
Pepsi
![Page 31: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/31.jpg)
Complementary vs. Substitute
Can YOU tell the difference????
![Page 32: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/32.jpg)
Substitute
![Page 33: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/33.jpg)
Complementary
![Page 34: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/34.jpg)
Substitute
![Page 35: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/35.jpg)
Complementary
![Page 36: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/36.jpg)
Substitute
![Page 37: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/37.jpg)
Substitute
![Page 38: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/38.jpg)
Complementary
![Page 39: Goal 8 demand and changes](https://reader035.fdocuments.net/reader035/viewer/2022081417/55851450d8b42ac10a8b5059/html5/thumbnails/39.jpg)
Elasticity of Demand
How much the quantity demanded will change if the price rises or falls.