The demand schedule

a topic in Health Economics

1. The Demand Schedule Group 2 Presentation

2. Demand Schedule “The higher the price or the more expensive a product is, the less quantity people are willing to buy of the product. Conversely, the lower price of a product, the more the consumers demand of such product.” - relationship between the price of a good and the quantity of the goods that consumers are willing to buy. -represented by the demand curve, when plotted.

3. The Demand Curve -graphical representation of the demand schedule. It is a downward sloping curve. - It shows the inverse relationship between the price and quantity of goods that consumers are willing to buy.

4. The demand curve, a downward sloping curve, shows the relationship between the price of a good and the quantity demanded. At a lower (P1), quantity demanded is higher (Q1). At a higher price (P2), quantity demanded is lower (Q2).

5. The Law of Downward and Sloping Demand When the price of a commodity is increased (all other things being equal), consumers tend to buy less of the said commodity. On the other hand, when the price is decreased (or lowered), all other things being equal, quantity demanded for that specific product increases. This is represented by a graph running downwards to the right showing the inverse relationship between the price of a good and the quantity demanded of such.

6. Factors that Affect the Demand Curve *Own Price of the Product - The price of a product is a certain monetary value at which the product is being sold. A higher own price of a product decreases the demand for such. A lower price increases the demand. Thus, there is an inverse relationship between the price of the product and the quantity being demanded.

7. *Average Income As the Average Income of people and households increases, the demand for specific goods also increases. This is because when people have higher incomes, they have more money to spend for buying things. “Higher incomes make commodities relatively cheaper simply because people have more money to buy goods and services.”

8. *Population Size and Demographics As the population increases, more people will use commodities. As more members of the population enter adulthood, the demand for specific products that are being used by the specific age group also increases, e.g., cars, cigarettes, watches, among others. Remember that an increase in population generally increases the demand for most products, and changes or shifts in population demographics will affect the demand for specific products.

9. * Price of related goods Related goods can either be substitute products or complementary products. Substitute products - Are commodities that decrease the use of another product when more of these other products is used. . Remember that substitute products change and move in the opposite direction .

10. Complementary products - behave in the same direction. These are commodities that decrease the use of another products when less of the other complement is used- and vice versa. Remember that they change in the same direction.

11. * Taste of Buyers - influences buying decisions but is more difficult to assess. Taste, more likely than not, differs from person to person. -Although difficult to measure, taste is very important factor in buying decisions of consumers. It is what marketing companies try to determine before launching a certain product in the market by doing market research. Marketing companies spend a lot of money on these type of research. Why? Because in determining buyers’ tastes may lead to disastrous mistakes in the choice of products to offer to consumers. Likewise failure in selling or marketing such products may also lead enormous amount of money being wasted.

12. * Other particular factors -Climate and weather affect the demand for umbrellas and raincoats. Summer increases the demand for h alo-halo and ice cream. Fiestas affect the demand for lechon , pancit and beer.

13. The Demand Shift Any of the factors stated above may positively or negatively affect the actual demand for a certain product. Remember that: A shift to the Left corresponds to an actual decrease to the demand; A shift to the Right corresponds to an actual increase to the demand; and There is a “movement along the curve” if only the prices of products are manipulated.

14. The Demand Shifts. Shift to the right indicates a positive (+) shift, or an increase in actual demand for a commodity. Shift to the left indicates a negative (-) shift, or a decrease in the actual demand for a commodity. Movements along the curve are appreciated when only the prices of products are changed. There will be no actual shift.

15. THE END 