Saturday, January 16, 2016

Unit One: Chapters 3 and 4- Supply and DEMAND

DEMAND

Notes from (1/11/16)


Demand- The quantities that people are willing and able to buy at various prices.

The Law of Demand- States that there is an inverse relationship between price and quantity demand.

-Price INCREASES, Quantity DECREASES. As Price DECREASES, Quantity INCREASES.

Translation- When something happens to one thing, the total opposite happens to the other! As shown in the graph above! 

QUESTION?- What causes a "change in quantity demanded"? (QD)

ANSWER- in price

P.S.- We use the Delta sign to represent change now! (Looks like a triangle...It's a triangle)

QUESTION?- What causes a "change in demand"? (D)

ANSWER- There are 5 reasons!:

1.) in Buyer's Taste (Advertisement)

2.) in the Number of Buyers (Population)

3.) in the Price of Related Goods:
     -Complimentary Goods
     -Substitute Goods

4.) in Income
     -Normal Goods: As people's income rises, demand for goods and services rise
     -Inferior Goods: An increase income causes a fall in demand. 

5.) in Expectations (Always looking towards the future) 


-JaelyNoTainted
Like Jaelyn (SPACE) Not (SPACE) Tainted
Get it?

No comments:

Post a Comment