DEMAND  When demand decreases, the demand curve shifts

leftward from D0 to D1.

Quantity demanded
 When demand increases, the demand curve shifts
 The amount of a good, service, or resource that people
rightward from D0 to D2.
are willing and able to buy during a specified period at a
specified price.
Demand Curve Shifts
 The quantity demanded is an amount per unit of time. For
• If we want to understand how the market demand changes
example, the amount per day or per month.
The Law of Demand
Other things remain the same,
• If the price of a good rises, the quantity demanded of that
good decreases.
• If the price of a good falls, the quantity demanded of that
good increases.
Demand Schedule and Demand Curve Demand
The relationship between the quantity demanded and the price
of a good when all other influences on buying plans remain the
same.
Demand is a list of quantities at different prices and is
illustrated by the demand curve.
• Demand schedule - A list of the quantities demanded at
each different price when all the other influences on
buying plans remain the same.
• Demand curve - A graph of the relationship between the
quantity demanded of a good and its price when all other
influences on buying plans remain the same.
Individual Demand and Market Demand when price changes, we move along the demand curve
• If we want to understand when there is a change in any other
determinant of demand, we shift the demand curve

The main influences on buying plans that change demand are:

o Prices of related goods
o Income
o Expectations
o Number of buyers
o Preferences
Prices of Related Goods
Substitute
– A good that can be consumed in place of another good.
For example, apples and oranges.
– The demand for a good increases, if the price of one of its
substitutes rises.
Market demand – The demand for a good decreases, if the price of one of its
The sum of the demands of all the buyers in a market. substitutes falls.
The market demand curve is the horizontal sum of the demand Complement
curves of all buyers in the market. – A good that is consumed with another good. For example,
ice cream and fudge sauce.
– The demand for a good increases, if the price of one of its
complements falls.
– The demand for a good decreases, if the price of one of its
complements rises.
Income
• The demand for a normal good increases if income increases.
• The demand for an inferior good decreases if income
increases.
Expectations
• Expected future income and expected future prices influence
demand today.
• For example, if the price of a computer is expected to fall next
month, the demand for computers today decreases.
Number of Buyers
Changes in Demand • The greater the number of buyers in a market, the larger is
Change in the quantity demanded - A change in the quantity of a the demand for any good.
good that people plan to buy that results from a change in the Preferences
price of the good. • When preferences change, the demand for one item
Change in demand - A change in the quantity that people plan to increases and the demand for another item (or items)
buy when any influence other than the price of the good decreases.
changes. • Preferences change when:
– People become better informed
– New goods become available.