C4S1: Demand Main Idea: –Demand is a willingness to buy a product at a particular price.

C4S1: Demand

• Main Idea:– Demand is a willingness to buy a product

at a particular price.

C4S1: Demand

• Key Terms:– Demand– Microeconomics– Demand schedule– Demand curve– Law of Demand– Market demand curve– Marginal utility– Diminishing Marginal Utility

C4S1: What is Demand?

• An Introduction to Demand– Microeconomics deals with individual decision-

making– Demand is important to know in business planning– Must know what people have the willingness and

ability to buy

C4S1: What is Demand?

• An Introduction to Demand– Individual Demand Schedule

• Shows the amount of a product that a consumer will buy at a given price

• Willing to buy more at a lower price

Figure 4.1The Demand for Compact DiscsFigure 4.1The Demand for Compact Discs

C4S1: What is Demand?

• An Introduction to Demand– Individual Demand Curve

• Information from the schedule is placed on a graph

Figure 4.1The Demand for Compact DiscsFigure 4.1The Demand for Compact Discs

C4S1: What is Demand?

• Law of Demand– As price goes up, quantity demanded goes down– As price goes down, quantity demanded goes up

C4S1: What is Demand?Figure 4.2Individual and Market Demand CurvesFigure 4.2Individual and Market Demand Curves

C4S1: What is Demand?

• Demand and Marginal Utility– The extra satisfaction you get from consuming one

more unit of an item– Slices of pizza, soda, etc, all have diminishing

marginal utility