Monday, September 8, 2014

Demand 1 - Demand & Quantity Demand


Demand - definition - the willingness and the ability to purchase a quantity of a good or service at a                                       certain price over a period of time

Law of Demand - an increase in price leads to a decrease in Quantity Demand (Qd).

Introduction to Demand - by mjmfoodie.

Watch the video and then see if you can answer this AP exam question,,

2000 AP Exam Microeconomics - 

Answer - (C) In the past several months, as the price of compact disk players has decreased the quantity of compact disk players sold has increased. ( Doesn't this make sense, price goes down more is bought/sold)

* In a demand curve the price and the Quantity Demanded have an inverse relationship... 

What does that mean? 

It means that as the price of a good goes up the quantity demanded goes down. Conversely, if the price goes down the quantity demanded goes up.

Say it again,,, (Price goes up less is bought,, Price goes down more is bought.)  Simple right?

Quantity Demanded is not Demand (Say it over & Over)

Please watch the video below..

Quantity Demand is a movement up or down the curve. 
Quantity Demand is driven by a Price Change.

I'm going write this again,,, Quantity Demanded is driven by price. Look at the curve above. When a cake costs

  • at $9 a cake the quantity demanded is 1 cake,
  • at $8 a cake the quantity demanded is 2 cakes, 
  • at $7 a cake the quantity demanded is 3 cakes,
  • at $6 a cake the quantity demanded is 4 cakes,
  • etc etc, all the way until at a price of $0 the quantity demanded will be 10 cakes.
All students have an issue with the difference between a movement on the curve and a shift of the curve. 

Take a moment and go to this website and play with the interactive graphics.

Always good to watch a video by Welker -

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