4.

1 The Demand Curve SLIDE

1

4 Demand

4.1 The Demand Curve

4.2 Elasticity of Demand
4.3 Changes in Demand

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4.1 The Demand Curve SLIDE
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CONSIDER
 Why are newspapers sold in vending machines that
allow you to take more than one copy?
 How much chocolate do you eat when you can eat all
you want?
 What cures spring fever?
 What economic principle is behind the saying, “Been
there, done that”?
 Why do higher cigarette taxes cut smoking by
teenagers more than by other age groups?

CONTEMPORARY ECONOMICS © Thomson South-Western

4.1 The Demand Curve
Objectives
 Explain the law of demand
 Interpret a demand schedule and
demand curve

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4.1 The Demand Curve
Key Terms
 demand
 law of demand
 marginal utility
 law of diminishing marginal utility
 demand curve
 quantity demanded
 individual demand
 market demand

CONTEMPORARY ECONOMICS © Thomson South-Western

4.1 The Demand Curve SLIDE
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Demand
Demand indicates how much of a product
consumers are both willing and able to
buy at each possible price during a given
period, other things remaining constant.

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4.1 The Demand Curve SLIDE
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Law of Demand
The law of demand says that quantity
demanded varies inversely with price,
other things constant.
Thus, the higher the price, the smaller the
quantity demanded.

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4.1 The Demand Curve SLIDE
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Law of Demand
Demand, wants, and needs
Substitution effect
Income effect
Diminishing marginal utility

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4.1 The Demand Curve SLIDE
8
Demand Schedule
and Demand Curve
Demand versus quantity demanded
Individual demand and market demand

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4.1 The Demand Curve SLIDE
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Demand Schedule
and Demand Curve for Pizza
Quantity
Price per Demanded
Pizza per Week
(millions)

a $15 8
b 12 14
c 9 20
d 6 26
e 3 32
Figure 4.1
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4.1 The Demand Curve SLIDE
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Individual Demand for Pizzas

(a) Hector (b) Brianna (c) Chris

$12 $12 $12

8 8 8
Price

4 dH 4 dB 4 dC
1 2 3 Pizzas 1 2 1
(per week)
Figure 4.4
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4.1 The Demand Curve SLIDE
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Market Demand for Pizzas

(d) Market demand for pizzas

dH + dB + dC = D

$12
8
Price

1 2 3 6 Pizzas
(per week)
Figure 4.4
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