Laws of Demand by

Laws of Demand Questions

jennifer_lor_082499 — 2015-11-03 15:43:45 UTC

a. Define Demand: Willingness and ability to buy a good at a range of prices. (Resources/Services)

Laws of Demand Questions

jennifer_lor_082499 — 2015-11-03 15:57:55 UTC

c. With the price of ice cream at $8, why is demand low?: Very few consumers who are both willing and able to buy ice cream for eight dollars per scoop, the benefit that consumer derived from a single scoop of ice cream is simply not worth the cost of eight dollars for a single scoop. We can assume that the quantity demand eight dollars will be relatively low

Laws of Demand Questions

jennifer_lor_082499 — 2015-11-03 15:58:21 UTC

b. Define Law of Demand: There is always an inverse relationship between the price of a good and the quantity demand. (When the price of a good is high a lower quantity will be demanded by the buyers of that good.)

Laws of Demand Questions

jennifer_lor_082499 — 2015-11-03 15:58:48 UTC

d. With the price of ice cream at $3, predict the quantity of demand? : $600

Laws of Demand Questions

jennifer_lor_082499 — 2015-11-03 15:59:59 UTC

e. And remaining questions? :

Warm-Up

jennifer_lor_082499 — 2015-11-03 16:08:43 UTC

- What products or services will be in high demand this month & next? : Some products what will be in high demand this month would be turkey, potato. Some services would be hair/nail services

NOTES

jennifer_lor_082499 — 2015-11-03 16:10:55 UTC

Marginal utility: - pleasure, usefulness, or satisfaction customers receive from a prouct/service - Varies customer to customer Diminishing marginal utility: - Additional marginal utility decreases as more units are consumed - Ex: eat 1 slice of cake @ 3 p.m & receive satisfaction & pleasure; eat a 2nd slice of cake 2 hours later and level of satisfaction - Diminishing marginal utility indicates a willingness not to purchase or consume more of a good/service Factors can send demand up or down #1. # of consumers in the market - - population #2. Change in incomes - - bad economy or reduction in pay or lay offs #3. Changes in tastes & popularity - - seasonal or holidays #4. Changes in expectations - - thinking about the future #5. Change in the prices of related goods or services - - changes in substitutes or complements Elasticity of Demand - Extent to which a change in price causes a change in the quantity demanded - When a demand is elastic, a change in price causes a larger percentage of change in quantity. Inelastic Demand - Prices changes have little effect on the quantity demanded * Example : gas prices , Turkey @ Thanksgiving time - Provide an example of good/service that regardless of the price consumers will purchase