Transcript Lesson 2 - Demand - bhs

Starter Activity
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Look at the homework task
What does your graph look like?
What relationship between price and demand have
you identified?
Discuss in groups
Lesson Objectives
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To understand the relationship between Price and
Demand
To understand other factors that can affect Demand
What determines demand
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Discuss in groups
What determines Effective Demand?
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Population structure
Taste/Fashions
Substitute/Complementary products
Price
Income levels
Competition
The Demand Curve
The demand curve slopes
downwards from left to right
(a negative slope) indicating
an inverse relationship
between price and the
quantity demanded. Quantity
demanded will be higher at
lower prices than at higher
prices. As price falls, quantity
demanded rises. As price
rises, quantity demanded falls.
Price (£)
£10
£5
Demand
100
150
Shifts in the demand curve
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What would happen on your diagram if Pepsi
invested £10million on an advertising campaign?
How would we show this on the curve?
Shifts in Demand Curves
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Shifts will occur if there are changes that will affect
demand at all price levels
Changes in price will NOT result in shifts in the
demand curve – just a movement along it
Shifts in Demand
What changes
could have resulted
in shifts shown
here?
Price (£)
£10
D1
Demand
D2
10
100
200
Inferior Goods
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For most products, as incomes rise, people have
more spending power, and tend to demand more
products.
Luxury, expensive items tend to be demanded more
especially as incomes rise
Inferior goods are exceptions to this, and tend to be
demanded less as incomes rise and more as incomes
fall – can you think of some examples?
Plenary
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Draw a demand curve diagram that will illustrate
the following
 Demand
for England Football shirts during a major
tournament
 Demand for brand new BMW cars during recession