Economics Quantity Demand
Changes in Tastes: Preferences
When a product becomes a fad, more of the products are demanded and sold at every price.
Changes In Population
When population increases, opportunities to buy and sell increase, and so does demand for most products.
Quantity Demanded vs. Demand
- A change in quantity demanded is caused by a good CHANGE IN PRICES of a good. - If SOMETHING OTHER THAN PRICE
Section 2 Vocabulary
- Demand Schedule - Demand Curve - Complementary Good
Price Elasticity of Demand
- ELASTIC demand occurs when the demand for some goods is GREATLY AFFECTED by the price. - INELASTIC demand occurs when the demand for some goods is less affected by the price.
Price Elasticity of Demand (continued)
- How many substitutes exist and how closely they provide the same quality and service affects elasticity of demand(fewer of no substitutes make demand inelastic. - Percent of a personal budget spent on that item affects elasticity of demand (the higher the percent of a budget), the more elasticity of the budget to spend. - How much time consumers have to adjust to the new price affects elasticity of demand (more the makes for greater elasticity).
Price Elasticity of Demand (continued)
- luxury items(things people want but do not need to survive) are elastic. - Staples(i.e. Certain foods, medicine, etc.) are inelastic. Consumers are not flexible with these items and will purchase them no matter what.
Graphing the Demand Curve
A DEMAND SCHEDULE is a table is proves and the quantity demanded at each price. - The higher the demand the lower the price. - The lower the demand higher the price.
Graphing the Demand Curve
A demand curve graphs the quantity demanded of a good or service at each possible price.
Complementary Goods
Comments or complementary goods are products that's are bought and sold together. A decrease in the price of one will increase the demand for other and vice versa.
Elasticity
How much consumers respond to a given change in price is elasticity.
Substitutes
The availability of substitutes affects demand. - An increase in the price is the airline tickets will create an increase in demand for other methods of travel.
Changes in Income
The demand for goods and services depends on income .