Demand

Demand

Open Ended

What comes to mind when you hear the word demand?

What is demand?

refers to the amount of some good or service consumers are willing and able to purchase at each price. Demand is based on needs and wants—a consumer may be able to differentiate between a need and a want, but from an economist’s perspective they are the same thing. Demand is also based on ability to pay. If you cannot pay, you have no effective demand.

Open Ended

What are some goods or services you as a consumer may want?

What is your interpretation of this image?

The law of demand

An increase in the price of a good or service almost always decreases the quantity demanded of that good or service. Conversely, a decrease in price will increase the quantity demanded.

Key terms to remember about demand

• What a buyer pays for a unit of the specific good or service is called price

• The total number of units purchased at that price is called the quantity demanded

What can you identify in the picture?

If burger king increased their prices and McDonalds remained the same which would you prefer?

Open Ended

Lets assume you are accustomed buying Chinese soups on a daily basis but recently got a pay cut because of Covid, would you still continue buying the soup or not?

Are any of these drinks your favorite?

Determinants of Demand

• The price of the commodity- This pertains to what prices are set on the good and will determine if persons buy more or less

• The price of alternative commodities- This takes into consideration what other goods are priced at and whether or not they compete with the price of another similar product

  
  

Determinants of Demand

• The income of buyers- The amount of money persons make can influence how much purchasing power they have

• Preferences of the buyer- Each consumer has unique taste that will allow them to purchase different goods at a particular point in time