• This saying will be used for 4 different definitions. All you will have to do is fill in the blanks!!

• THE AMOUNT OF A GOOD OR SERVICE THAT ___1____ ARE WILLING TO ____2_____AT _____3______ PRICE(S)

• 1)CONSUMERS OR PRODUCERS• 2) BUY OR PRODUCE• 3) EACH SPECIFIC (PRICE) OR VARIOUS(PRICES)

UNIT 2 IMPACT STATEMENT

AND THAT IS IMPORTANT BECAUSE????

• You will have to be able to identify each of those 4 definitions on a graph.– It could be a DIVING LINE, A SOARING LINE, OR

JUST A DOT

Like this

OR THIS

Dot or Line? Demand or supply?

• REMEMBER THIS????

THE AMOUNT OF A GOOD OR SERVICE THAT ___1__ ARE WILLING AND ABLE TO ____2_____AT ___3__ PRICE(S)

1) CONSUMERS OR PRODUCERS2) BUY OR PRODUCE3) EACH SPECIFIC (PRICE) OR VARIOUS(PRICES)

The amount of a good or service that consumers are willing and able to buy at

various prices. This is represented by the line.

Quantity Demanded

• The amount of a good or service that consumers are willing and able to buy at

Each Specific price.• The Dot on The Graph

Law of Demand

• Consumers are willing to buy more at lower prices than higher prices.

• The relationship between price and quantity demanded is INVERSE (opposite).

Things that affect the law of demand:

• Income effect: When consumers have more money they are willing to buy more.

• Substitution effect: The tendency of consumers to replace a higher priced products with similar, cheaper products. Example: Why buy a can of Pepsi when the price of a can of Coke is cheaper

• Law of diminishing marginal utility: As consumers consume more of a product, each additional unit becomes less satisfying.

Example: When eating pancakes, is there a point where you get sick of them????

Difference Between Quantity Demanded and Demand

Quantity Demanded is the dot on the graph.

Demand is the

entire line linking all the dots.

Plotting Demand

• The Dots (10,5) (20,3.75)And (40,2) are Quantities Demanded. (Points)

• The entire line connects all Quantities Demanded and Represents Demand.

Demand vs. Quantity Demanded

Demand or Quantity Demanded

Demand or Quantity Demanded?

What does

it look like?

Price (P)

Quantity

D

Price

Quantity (Q)

D1

P1

Q1

P2

Q2

D2

Demand Schedule for Apples

Price per apple

Quantity Demanded

$4 20,000

$3 40,000

$2 60,000

$1 80,000