Demand
Consumers demand goods and services to satisfy their needs and wants. Demand is the number units of goods a consumer will buy at various prices.
The law of demand states that an increase in price leads to a decrease in quantity demanded or a decrease in price leads to an increase in quantity demanded ceteris paribus. A demand schedule is a table that shows the different quantities demanded for a good at various market prices at any given time. (Fig.1) |
A demand curve is a graph illustrating the demand for a good at various prices at any given time. (Fig.2)
· Demand curves have a negative slope, i.e. sloping from left to right.
·This implies that at higher prices, consumers are willing to purchase less than at lower prices.
Market Demand is the sum of all the individual demands for a particular good or service. (Fig.3)
·The market demand at each price is the sum of the two individual demands.
·We sum the individual quantities on the horizontal axis of the individual demand curves to find the total quantity demanded, i.e. the market demand. (Fig.4)
·This implies that at higher prices, consumers are willing to purchase less than at lower prices.
Market Demand is the sum of all the individual demands for a particular good or service. (Fig.3)
·The market demand at each price is the sum of the two individual demands.
·We sum the individual quantities on the horizontal axis of the individual demand curves to find the total quantity demanded, i.e. the market demand. (Fig.4)
A shift in the demand curve is caused by a change in any non-price determinant demand, e.g. change in consumers’ income, tastes, expectations or prices of related goods. Fig. 5
· A rightward shift shows an increase in the quantity demanded.
· A leftward shift shows a decrease in the quantity demanded.
· A rightward shift shows an increase in the quantity demanded.
· A leftward shift shows a decrease in the quantity demanded.
A movement along the demand curve is caused by a change in the price of the good itself. This may occur because of a change in supply conditions. Fig.6
Bibliography
Hayes, S, Murray, T, O'Connor, B (2012). Positive Economics Leaving Certificate. Dublin: Edco. 22-58.
Mankiw, G, Taylor, M (2011). Economics. 2nd ed. United Kingdom: South-Western Cengage Learning. 68-94.
Marshall, A. (2003). Economics Basics: Supply and Demand. Available: http://www.investopedia.com/university/economics/economics3.asp. Last accessed 11th Nov 2013.
Mankiw, G, Taylor, M (2011). Economics. 2nd ed. United Kingdom: South-Western Cengage Learning. 68-94.
Marshall, A. (2003). Economics Basics: Supply and Demand. Available: http://www.investopedia.com/university/economics/economics3.asp. Last accessed 11th Nov 2013.