Law of Demand.notebook November 03, 2014 Supply and Demand Supply - PDF document

Law of Demand.notebook November 03, 2014 Supply and Demand Supply and Demand Economic model used to describe forces in a competitive market What do you think of when you hear the phrase "supply and demand"? Which type of economic system Pull Pull would this apply to? Oct 20­8:34 AM Oct 20­8:36 AM Where do you see supply and demand? Focus: DEMAND Demand: Willingness and ability to purchase a good or service at all price levels Oct 20­8:41 AM Oct 20­8:43 AM Market for Quiz Pass Year-Long Quiz Pass!! Price Quantity Law of Demand: $100 Ceteris paribus, As price increases, quantity $75 demanded decreases. $50 As price decreases, quantity $25 demanded increases. $5 How would you describe the slope? Oct 20­8:45 AM Oct 20­8:51 AM 1

Law of Demand.notebook November 03, 2014 Demand reflects utility. Why is the demand curve downward sloping? P $8 Substitution Effect $6 $4 Income Effect D $2 0 1 2 3 4 Q Oct 20­8:52 AM Oct 20­8:54 AM Now it's your turn to practice! Key Point Summary 1. What does the Law of Demand say? 2. Describe the relationship between price and quantity demanded? 3. How does a demand curve reflect the law of demand? Oct 20­9:00 AM Oct 20­9:07 AM 2

Attachments demand for greebes.pdf