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Demand

Demand. The desire to own something and the ability to pay for it 2 Criteria: Willing to buy Able to buy. Law of Demand. When a good’s price is lower, consumers will buy more of it P Q When a good’s price is higher, consumers will buy less of it P Q. Demand Schedule.

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Demand

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  1. Demand • The desire to own something and the ability to pay for it • 2 Criteria: • Willing to buy • Able to buy

  2. Law of Demand • When a good’s price is lower, consumers will buy more of it • PQ When a good’s price is higher, consumers will buy less of it • P Q

  3. Demand Schedule • A table that lists the quantity of a good a person will buy at each different price • Inverse relationship P Q 5 1 4 2 3 3 2 4 1 5

  4. Factors that can Change Demand R price of related goods Income Preference Expectation of price change Market size/population

  5. Price of Related Goods • Substitutes: goods used in place of one another • Compliments: two goods that are bought and used together

  6. Income Types of Goods • Normal: As income increase, demand increases • Neutral: if income increases, demand stays the same • Inferior: as your income decreases, demand goes up, as your income increases the demand goes down

  7. Preference • People change what they like • Fads Hot Demand ;not Hot Demand

  8. Expectation • If you think the price will go up, demand goes up

  9. Market Size/Population Which age group in America has grown over the last 10 years?

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