Law of Demand.notebook November 03, 2014 Supply and Demand Supply - - PDF document

Law of Demand.notebook 1 November 03, 2014

Oct 20­8:34 AM

Supply and Demand

What do you think of when you hear the phrase "supply and demand"?

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Supply and Demand

Economic model used to describe forces in a competitive market

Pull Pull

Which type of economic system would this apply to?

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Where do you see supply and demand?

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Focus: DEMAND

Demand: Willingness and ability to purchase a good or service at all price levels

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Year-Long Quiz Pass!!

Price Quantity $100 $75 $50 $25 $5

Law of Demand: Ceteris paribus, As price increases, quantity demanded decreases. As price decreases, quantity demanded increases.

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Market for Quiz Pass How would you describe the slope?

Law of Demand.notebook 2 November 03, 2014

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Why is the demand curve downward sloping? Substitution Effect Income Effect

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Demand reflects utility. P D

1 2 3 4 $2 $4 $6 $8

Q

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Now it's your turn to practice!

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Key Point Summary

• 1. What does the Law of Demand say?
• 2. Describe the relationship between price and quantity

demanded?

• 3. How does a demand curve reflect the law of demand?

Attachments demand for greebes.pdf