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Demand Curves

Learn about the components of a demand schedule, create and analyze sample demand curves, and understand the Law of Demand in economics. Explore market demand curves and the concept of Diminishing Marginal Utility.

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Demand Curves

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  1. Demand Curves • Understand the components of a demand schedule/curve • Create and analyze sample demand schedules/curve to illustrate a product’s demand • Understand the “Law of Demand”

  2. What?!

  3. Demand Illustrated • 2 variable: PRICE and QUANTITY of specific product at a specific point in time • Demand Schedule: shows the various quantities demanded of a particular product at all reasonable market prices • Demand Curve: graph showing the quantity demanded at each and every price that might prevail in the market

  4. Act… • Complete the demand curve worksheet • We will review together and complete a sample as a class

  5. Market Demand Curve • Combination of individual’s demand curves to show the market demand • Shows the quantity demanded by everyone interested in purchasing the product • Lets use our class’ example to illustrate • Simple quantity shift (total) • Add up quantity (price stays the same)

  6. “Law of Demand” • 1 paper clip = the best and newest item on the market…selling for $500.00 • What is this law?

  7. “Law of Demand” • Def: the quantity demanded varies inversely with its price • Price increase = quantity decrease • Price decrease = quantity increase ***The more expensive something is, the quantity demand goes down Where do you see this in the real world?

  8. Complete • Define “Law of Demand” in your own words… • How would you describe it to your friend who asks you, “Hey, what’s up with the Law of Demand?” • Discuss with a neighbor…and me

  9. Diminishing Marginal Utility • Donut experiment results? • Def: the principle that says as we use more and more of a product, we encounter less and less satisfaction from it. What are some other real-world examples of this phenomenon?

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