Economics

1
Economics

• Chapter 4
• Section 2

2
Change in Quantity Demanded

• Change in quantity demanded- a movement along the
  demand curve that shows a change in the quantity
  of the product purchased in response to a change
  in price
• Income effect- the change in quantity demanded
  because of a change in price that alters
  consumers real income

3
(No Transcript)
4
(No Transcript)
5
Change in Quantity Demanded

• Replace a more costly event like going to a
  concert with a less costly event like buying a CD
• Substitution effect- the change in quantity
  demanded because of the change of the relative
  price of the product

6
Change in Demand

• Change in demand- people are now willing to buy
  different amounts of the product at the same
  prices results in an entirely new curve
• Consumer income can cause a change in demand

7
(No Transcript)
8
Consumer Tastes

• Advertising, news reports, fashion trends, the
  introduction of new products and changes in the
  season can affect consumer tastes
• This will effect the demand curve- positively w/
  good advertising or negatively as people get
  tired of things
• Inventions- good/ bad

9
(No Transcript)
10
Compliments/ Substitutes

• Substitutes- can be used in the place of other
  products- exp. Butter and margarine
• The demand for product tends to increase if the
  price of its substitute increases
• Complements- use of one increases the use of the
  other- exp- personal computer and software-
  Gillette razor blades
• The demand for complimentary products tend to do
  down as the price of the compliment goes up

11
(No Transcript)
12
Expectations/ of Consumers

• Expectations- if people expect a product to come
  to the market soon it may change what they buy,
  or weather expectations effecting businesses
• Number of consumers- an increase or decrease in
  the number of consumers can cause a shift on the
  market demand curve

13
(No Transcript)