L 3- Individual Demand

bang for your buck

marginal benefit ÷ price "Relative to the next best alternative"

A demand curve reveals your...

...marginal benefit. Q: What reveals you marginal benefit?

Equi-Marginal Rule

***Keep buying until "Price = Marginal benefit"***

Graphing Conventions

-Price on Vertical Axis -Quantity on Horizontal Axis -Units on both axes -Quantity refers to a period of time (e.g. Quantity of jeans demanded in the next year) -Label the curve -Demand curve can be curved or straight line.

Downward sloping curve

-The lower the price, the higher quantity demanded. -The cheaper something is, the more you buy. LAW of demand: -"The quantity demanded is higher when prices are lower"

Rational Rule for Buyers

Buy more of an item if its marginal benefit is greater than (or equal to) the price.

Individual demand curve

Your individual demand curve simply graphs your plans. ▶ The quantity you plan to buy, depending on the price ▶ Holding other things constant (income, fashion trends etc.)