The Demand Curve

Mr. Poseys Economics Class

A lil review...
Market
collections of buyers and sellers that
together determine the price of a good
Opportunity Cost
the trade-offs that consumers, firms, and
workers face as they make a decision

Objective!
Identify the Demand curve and its components
Illustrate shifts in the Demand curve.

...what is demand?

Demand
Relationship between the quantity of a good
that consumers are willing to buy and the price
of the good.
Inverse relationship

What does that mean?

If prices increase,
the quantity demanded decreases.
If prices decrease,
the quantity demanded increases

Price: $.39/lb
Quantity Demanded: 5

Example!

Price: $.39/lb $1.39/lb

Quantity Demanded: 5 1
Intuition?

Example!

The Demand Curve

Price
($)

5
4
3
2
1

Draw our axises!

Quantity demanded
(units)

Price

Downward
sloping!

5
4
3
2
1

Draw our curve!

Quantity demanded

Price

Downward
sloping!

5
4
3
2
1

Draw our curve!

Quantity demanded

Determinants of Demand

Price

5
4
3
2
D1

1
D

D2
1

Some
things can
cause the
curve to
shift!

Quantity demanded

Price

What if more
people liked
bananas?

5
4
3
2
D1

1
D

D2
1

Change in Tastes

Demand
Increases!

Quantity demanded

Price

Wages go
down.

5
4
3
2
D1

1
D

D2
1

Income changes

Decrease in
Demand

Quantity demanded

(More examples of application would follow)