Скачать презентацию Demand AG BM 102 Talk is cheap
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Скачать презентацию Demand AG BM 102 Talk is cheap
Скачать презентацию Demand AG BM 102 Talk is cheap
Demand AG BM 102
Talk is cheap. Supply exceeds Demand.
Background • • First question is what can you sell? How much? What price? Related questions – What happens over time? • How about related products?
Demand - A schedule of the quantities of product that consumers will buy at various prices
A Demand Schedule • Is a price- quantity relationship • Assumes other things, such as income, are constant • Is for a fixed period of time – per month, per year, etc.
An Example - Beef Price/lb. $5. 00 Quantity lb. /cap. 50 $3. 75 Quantity lb. /cap. 75 $4. 75 55 $3. 50 80 $4. 50 60 $3. 25 85 $4. 25 65 $3. 00 90 $4. 00 70 $2. 75 95
Points about Graphs • Price is on the vertical axis • Quantity is on the horizontal axis • Since consumers see prices and choose quantities, Q = f(P) • This is opposite of usual graphs in algebra where the dependent variable is on the vertical axis
Why do we have demand curve sloping downward?
Downward Sloping Demand • For ordinary goods, the additional unit is worth less – if you have eaten six donuts, how much is the seventh worth to you? • For ordinary goods, a sale induces consumers to buy more.
What happens when the prices of a related good changes?
Two choices • The consumption of beef goes down when the price of chicken goes down – substitute goods • The consumption of beef goes up when the price of hamburger buns goes down – complementary goods (good consumed together)
Price Chicken Falls Price of Chicken
What if income changes? • Depends on good • Ordinary goods – consumption rises • Inferior Goods – consumption falls bologna • Size of change depends on the characteristics of the good
Income Falls
Tastes and Preferences • • Affect demand Health news New competing products Changes in lifestyle
Bad Health News about beef
Some terms • A change in demand – the line moves because of some external factor – health news • A change in quantity demanded – a price change induces the consumer to move to a new point on the line
Change in Demand? or Change in Quantity Demanded? • • • Drought reduces crop size? Russia puts embargo on our wheat Consumers object to GMO soybeans Price of substitute falls Economy in slump - Income falls New technology makes chickens lay more eggs
Concluding Comments • Demand is a key to understanding economics • It is the ultimate measure of what your product is worth • Is the price of milk too low? • Not given how much is available – now it is a buyer’s market
Скачать презентацию Demand AG BM 102 Talk is cheap
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