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LESSON 4.3 Changes in Demand

Objectives. LESSON 4.3 Changes in Demand. Identify the determinants of demand, and explain how a change in each will affect the demand curve. Distinguish between the money price of a good and the time price of a good. Key Terms. LESSON 4.3 Changes in Demand. tastes

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LESSON 4.3 Changes in Demand

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  1. Objectives LESSON 4.3Changes in Demand Identify the determinants of demand, and explain how a change in each will affect the demand curve. Distinguish between the money price of a good and the time price of a good. CONTEMPORARY ECONOMICS: LESSON 4.3

  2. Key Terms LESSON 4.3Changes in Demand tastes movement along a given demand curve shift of a demand curve CONTEMPORARY ECONOMICS: LESSON 4.3

  3. Changes That Can Shift the Demand Curve • Changes in consumer income • Normal goods • Inferior goods • Changes in the prices of related goods • Substitutes • Complements • Changes in the size or composition of the population • Changes in consumer expectations • Changes in consumer tastes CONTEMPORARY ECONOMICS: LESSON 4.3

  4. Movement Along a Demand Curve Versus a Shift of the Curve • A change in price, other things constant, causes a movement along a demand curve, changing the quantity demanded. • A change in one of the determinants of demand other than price causes a shift of a demand curve, changing demand. CONTEMPORARY ECONOMICS: LESSON 4.3

  5. $15 12 b f 9 Price per pizza 6 3 0 D D' 8 14 20 26 32 Millions of pizzas per week An Increase in the Market Demand for Pizza CONTEMPORARY ECONOMICS: LESSON 4.3

  6. $15 j b 12 9 Price per pizza 6 3 0 D D' 8 14 20 26 32 Millions of pizzas per week A Decrease in the Market Demand for Pizza CONTEMPORARY ECONOMICS: LESSON 4.3

  7. Extensions of Demand Analysis • Role of time in demand • The cost of waiting in line CONTEMPORARY ECONOMICS: LESSON 4.3

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