Transcript 1-What is “demand”?

WHAT IS DEMAND?
1-What is “demand”?
The combination of desire, ability and, willingness to
buy a product good or service]
2-Define: microeconomics.
The part of economics that studies small units,
such as individuals and firms.
3-Collectively, what do microeconomic
concepts help explain?
How prices are determined and how
individual economic decisions are made.
4-What occurs in a “market economy”?
People and firms act in their own best interests to
answer the basic: WHAT, HOW and FOR WHOM
5-A_________________is a table that lists how
much of a product consumers will buy at all
possible levels.
Demand schedule
6-The _________is a graph showing the quantity
demanded at each and every price that might
prevail in a particular market.
Demand Curve
7-State the “Law of Demand”
Consumers will buy more of a product at lower
prices and less of a product at higher prices.
8-A __________shows how much of a product all
consumers will buy at all possible prices.
Market Demand Curve
9a. How many CDS would Mike purchase the following prices?
$25= 0
$15= 3
$ 5=
8
b. At which prices would Julia be willing to purchase the
following quantities of CDS?
1 cds: $25
5 cds: $10
7 cds: $5
c. What is the market demand price for:
6 cds: $15
At $10, 10 cds is the market quantity demanded
10-Explain the concept of “marginal utility”?
It is the extra usefulness or additional satisfaction
a consumer gets from acquiring or using one more
unit of a product.
11-Explain the concept of “diminishing marginal
utility”?
The more we use a product, the extra satisfaction
a consumer receives from using additional
quantities of that product begins to decline.
That is why a consumer won’t pay as much for
each additional purchase.
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