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The Law of Demand. Objectives Explain the law of demand and how a demand schedule is represented in a demand curve. Understand the difference between and individual and a market demand curve. Law of Demand. Key Terms Demand Quantity demanded Law of demand Demand schedule Demand curve

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the law of demand

The Law of Demand

Objectives

Explain the law of demand and how a demand schedule is represented in a demand curve.

Understand the difference between and individual and a market demand curve.

law of demand
Law of Demand
  • Key Terms
    • Demand
    • Quantity demanded
    • Law of demand
    • Demand schedule
    • Demand curve
    • Individual demand curve
    • Market demand curve
law of demand1
Law of Demand
  • Demand
    • Relationship between price and quantity demanded for a good or service, when other variables are held constant.
    • The buying side in a market
  • Quantity demanded
    • The amount of goods and services purchased at a given price.
law of demand2
Law of Demand
  • Law of demand
    • There is an inverse relationship between the price of a good or service and the quantity buyers purchase
    • Guided by self interest
  • Demand schedule
    • A table that lists the quantity of a good or service consumers purchase at various possible prices
bob s demand schedule for dvds
Bob’s Demand Schedule for DVDs

Demand schedule: A table that lists the quantity of a good or service consumers purchase at various possible prices

law of demand3
Law of Demand
  • Demand Curve
    • Formed by the line connecting points that represent possible combinations of price and quantity purchased by consumers
    • A summary of buying intentions
market demand
Market Demand
  • Individual demand curve (D1)
    • The demand for a single consumer
  • Market demand curve (Dtotal)
    • Sum of all the individual demand curves in a market
think pair share
Think/Pair/Share
  • Create an individual demand schedule (weekly) for each of the following goods at the provided price increments:
    • School Lunch $2, $4, $6, $8
    • Bottled Water $1, $3, $5, $7
    • DVD/BluRay $5, $10, $15, $20
  • With a partner combine your individual demand to create a market demand schedule for each product.

**Remember to hold all other variables constant**

review
Review
  • True or False: The concept of demand is based on the responses of sellers to price changes

False

review1
Review
  • True or False: A market demand curve is the sum of all the individual demand curves in a market

True

review2
Review
  • The law of demand states there is an ___________ relationship between the price of a good or service and the quantity buyers purchase.

Inverse

review3
Review
  • Quantity demanded is the __________ of goods and services purchased at a given price.

Amount

homework
HOMEWORK
  • Demand Homework #1
    • Plot and label the demand curve
    • Fill in the blanks, or choose the appropriate answer provided