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?
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