Demand Headlines
Average wages decline for workers around the countries. What will happen to the demand curve of movie tickets?
Shifts to the left, or decreases.
Superior Goods?
Diamonds and cars
Law of Demand
at a higher price, consumers will demand a lower quantity of a good
Change in quality demanded
a change in the specific quantity of a product that buyers are willing and able to buy
Price decreases
Move rightward on the curve
Fast food chain raises prices on all menu items. What will happen to the demand for burgers?
No shift in demand curve.
Normal Goods?
goods whose demand increases with an increase in income
Ex: Sugar
Demand schedule
a table that shows the quantity demanded at each price
Market demand curve
a graph that shows the relationship between the price of a product and the demand for that particular product
Price increase
move leftward on the curve
computer makers announce a 20% price cut. What will happen to the demand curve?
No shift in demand curve.
Inferior Goods?
a type of good whose demand declines when income rises
Ex: Instant noodles
Substitution effect
the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when its price rises.
Market demand schedule
a tabulation of the quantity of a good that all consumers in a market will purchase at a given price
expected price increase
Demand curve shifts to the right
Hospitals report a dramatic decrease in birth. What will happen to the demand for strollers.
Demand for strollers decrease.
Complements
Products that go hand in hand
Income effect
the resultant change in demand for a good or service caused by an increase or decrease in a consumer's purchasing power or real income
a graph that shows the relationship between the price of a good or service and the quantity demanded within a specified time frame
Price of a complement increases
Shifts to the left
Analysis predict video game prices to increase in the future. What will happen to the video game demand curve?
the demand will increase.
Substitutes
a product or service that consumers see as essentially the same or similar-enough to another product
Change in demand
a shift in consumer desire to purchase a particular good or service, irrespective of a variation in its price
Demand Schedule
a table that shows the quantity demanded at each price
Population increase
Demand curve to the right