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# Demand 2 - PowerPoint PPT Presentation

How is a shift in demand different from a change in quantity demanded? QD is the amount of a good or service a consumer is willing and able to purchase at each particular price at any given time. QD is notated by each separate point on the demand curve.

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## PowerPoint Slideshow about ' Demand 2' - moeshe

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Presentation Transcript

• How is a shift in demand different from a change in quantity demanded?

• QD is the amount of a good or service a consumer is willing and able to purchase at each particular price at any given time.

• QD is notated by each separate point on the demand curve.

• A shift in demand is shown as an entirely new demand curve, which is notated QD2.

Demand 2

Demand 2 demanded?

Demand 2

Demand 2 demanded?

• Elasticity of Demand

• Is determined by how much a change in price affects a change in the quantity demanded for a product.

• A change in price DOES NOT, on its own, cause a shift in demand

Demand 2 demanded?

• A good is elastic if:

• The product is not a necessity

• There are readily available substitutes

• The product’s cost represents a large portion of the consumer’s income

• Total Revenue and Elasticity of Demand demanded?

• Total revenue ( or total receipts) is simply the price of the product times the number sold of the product (TR=P x QD)

• If a price change causes total revenue to drop for a particular product, that product has an elastic demand

• If the total revenue rises despite a change in price, demand for that product is inelastic

Demand 2