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Understanding Changes in Demand Economics

Learn to identify and explain demand determinants, distinguish between money and time price, and analyze shifts versus movements in demand curves. Understand key terms and factors impacting demand in contemporary economics.

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Understanding Changes in Demand Economics

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  1. Objectives LESSON 4.3Changes in Demand Identify the determinants of demand, and explain how a change in each will affect the demand curve. Distinguish between the money price of a good and the time price of a good. CONTEMPORARY ECONOMICS: LESSON 4.3

  2. Key Terms LESSON 4.3Changes in Demand tastes movement along a given demand curve shift of a demand curve CONTEMPORARY ECONOMICS: LESSON 4.3

  3. Changes That Can Shift the Demand Curve • Changes in consumer income • Normal goods • Inferior goods • Changes in the prices of related goods • Substitutes • Complements • Changes in the size or composition of the population • Changes in consumer expectations • Changes in consumer tastes CONTEMPORARY ECONOMICS: LESSON 4.3

  4. Movement Along a Demand Curve Versus a Shift of the Curve • A change in price, other things constant, causes a movement along a demand curve, changing the quantity demanded. • A change in one of the determinants of demand other than price causes a shift of a demand curve, changing demand. CONTEMPORARY ECONOMICS: LESSON 4.3

  5. $15 12 b f 9 Price per pizza 6 3 0 D D' 8 14 20 26 32 Millions of pizzas per week An Increase in the Market Demand for Pizza CONTEMPORARY ECONOMICS: LESSON 4.3

  6. $15 j b 12 9 Price per pizza 6 3 0 D D' 8 14 20 26 32 Millions of pizzas per week A Decrease in the Market Demand for Pizza CONTEMPORARY ECONOMICS: LESSON 4.3

  7. Extensions of Demand Analysis • Role of time in demand • The cost of waiting in line CONTEMPORARY ECONOMICS: LESSON 4.3

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