Class 6 Law of Demand for eledtrical engineers

based on economics

1. Law of Demand

2. Quantity Demanded The quantity demanded of any good is the amount of the good that buyers are willing and able to purchase. Demand means desire backed by willingness and ability to pay.

3. Law of Demand Other things being equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.

4. Demand Schedule A table that shows the relationship between the price of a good and the quantity demanded

5. Demand Curve A graph of the relationship between the price of a good and the quantity demanded

6. Law of Demand

7. Reasons for downward-sloping demand Quantity demanded tends to fall as price rises for two reasons: Substitution effect: occurs because a good becomes relatively more expensive when its price rises. When the price of good A rises, I will generally substitute goods B, C, D, . . . for it. Income effect: when a price goes up, I find myself somewhat poorer than I was before.

8. Market Demand versus Individual Demand Market Demand: the sum of all the individual demands for a particular good or service.

9. Market Demand

10. Shifts in Demand

11. Shifts in Demand Variables that can shift the demand curve: Income Prices of related goods: Related Goods: Substitutes and Complements Tastes Expectations Number of buyers Population

12. Shifts in the Demand Curve versus Movements along the Demand Curve