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notebook # 11 Economics 4-2

notebook # 11 Economics 4-2. Factors Affecting Demand. Economics 4-2. Factors Affecting Demand. ESSENTIAL QUESTION : What factors might cause demand to either increase or decrease?. Economics 4-2. Factors Affecting Demand. GPS STANDARDS: SSEMI3-

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notebook # 11 Economics 4-2

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  1. notebook # 11Economics 4-2 Factors Affecting Demand

  2. Economics 4-2 Factors Affecting Demand ESSENTIAL QUESTION: What factors might cause demand to either increase or decrease?

  3. Economics 4-2 Factors Affecting Demand GPS STANDARDS: SSEMI3- a.) Identify and illustrate on a graph factors that cause changes in market supply and demand.

  4. Factors Affecting Demand • The demand curve is a graphical representation of the quantities that people are willing to purchase at all possible prices that might prevail in the market.

  5. Factors Affecting Demand • There are a number of factors that will cause demand to either increase or decrease.

  6. Factors Affecting Demand • These changes are usually of two types: • a change in the quantity demanded • and a change in demand.

  7. Factors Affecting Demand • The change in quantity demanded shows a change in the amount of the product purchased when there is a change in price.

  8. Factors Affecting Demand • The income effect means that as prices drop, consumers are left with extra real income.

  9. Factors Affecting Demand • The substitution effect means that price can cause consumers to substitute one product with another similar but cheaper item.

  10. Factors Affecting Demand • A change in demand is when people buy different amounts of the product at the same prices.

  11. Factors Affecting Demand • A change in demand can be caused by a change in income, tastes, a price change in a related product (either because it is a substitute or complement), consumer expectations, and the number of buyers.

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