UNIT II: CHAPTER 4 - DEMAND
Section 1 – Understanding Demand
WHAT IS DEMAND?
The willingness & ability of buyers to purchase
different quantities of a good at different prices
 Buyers & sellers together = market

What does willingness mean?
What does ability mean?
LAW OF DEMAND


Price & quantity demanded =
inverse (opposite) relationship
If P
 If P
Q
Q
DIFFERENT

Demand

Willingness & ability to
buy a good or service.

Quantity demanded

Number of units of a good
purchased at a specific
price.
WHY OPPOSITE?

Law of diminishing marginal utility

as a person consumes more units, the utility
(satisfaction) decreases
Relation to demand:
- More utility from a good = higher $ willing to pay
- Less utility from a good = lower $ willing to pay
MENTAL BREAK 

Evil eye baby - YouTube
Disneyland Prices:
(open your books to page 92)
Why does Disney charge the way they do?
What other companies do this?
LAW OF DEMAND IN #’S & PICTURES

Demand schedule

Chart showing LOD

Demand curve

Graph showing LOD

Individual demand curve

Market demand curve
*Demand curve for all
females drinking
coffee in the US.