What is Demand?

“What Is Demand?”

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Bellringer

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Lesson and Goal: Learn about “ What Is
Demand? ” Lessons 1

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Assignment : Mini Quiz 4.1 - Demand

Bellringer

In a Free Enterprise Economy, there are
three main players: ____________________,
___________________, and the ______________.

Multiple Choice

In a Free Enterprise Economy, there are

three main players: ____________________,

___________________, and the ______________.

• Officials, Consumers, and Entrepreneurs.

• Customers, Consumers, and Businesses.

• Government, Consumers, and Entrepreneurs.

• Government, Customer service, and Entrepreneurs.

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Open Ended

Why is the consumer considered the king in a free market economy?

Provide an example...

What Is Demand?

Lesson 1

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“Demand” for a product means more than simply the desire
to own it. Instead, demand includes desire and also the
willingness and ability to buy the product.

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Demand Curve

“

Demand Curve

graph showing the quantity
demanded at each and every possible
price that might prevail in the market
at a given time

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Graphing

Draw a demand curve:

The Law of Demand

• rule stating that more will be
  demanded at lower prices and less at
  higher prices; an inverse relationship
  between price and quantity demanded

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Open Ended

Law of Demand: rule stating that more will be

demanded at lower prices and less at

higher prices; an inverse relationship

between price and quantity demanded

PROVIDE AN EXAMPLE:

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Why we call it a law?

Economics is a social science—a study of the way we behave
when things around us change. In all of the sciences, we
speak of “laws” when a theory proves true after repeated
tests and it fits within our larger understanding of the field.
The inverse relationship between price and quantity
demanded appears in study after study, with people almost
always stating that they would buy more of an item if its
price went down, and less if the price went up.

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Why we call it a law?

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Market demand
curve:
demand curve
that shows the
quantities
demanded by
everyone who is
willing and able
to purchase a
product at all
possible prices
at one moment
in time.

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Utility --- to describe the amount of usefulness or satisfaction
that someone gets from the use of a product.

Marginal utility--- the extra usefulness or additional
satisfaction a person gets from acquiring or using one more
unit of a product.

Diminishing marginal utility --- decrease in additional
satisfaction or usefulness as additional units of a product are
acquired (also known as the Law of Diminishing marginal
utility)

Demand and Marginal Utility

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So, why does the demand curve is shaped like this?

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Recap

➢ What is demand?

➢ Demand Curve

➢ The law of Demand

➢ Law of Diminishing marginal utility