3. Demand Schedule
Table showing quantities demanded at
different possible prices
Price per CD Q demanded (millions)
$20 100
$15 600
$12 900
$10 1,100
4. Demand Curve
Downward sloping line that shows the
quantities demanded at each possible
price
$20
$15
price
$12
$10
100 600 900 1100
Quantity of Cds demanded
5. Determinants of Demand
Changes in population
Changes in income
Changes in Tastes and Preferences
Substitutes
Complementary Goods
A product often used with another product
See Figure 7.5, page 182
6. Corn Prices Rise to due
Increased Demand for Ethanol
http://www.biodieselinvesting.com/biodies
el-archives/2007/01/10/rise-in-corn-prices-
due-to-demand-from-ethanol-production/
7. Market Activity
1. Think of a product or service you or your
family would purchase regardless of price
– list the maximum price you would be
willing to pay for this
2. Think of a product or service you would
only purchase if you perceived it to be
relatively inexpensive. – list the maximum
price you would be willing to pay for this
8. Elasticity
Elasticity: Economic concept dealing with
consumers’ responsiveness to an increase
or decrease in price of product
Price elasticity of demand: economic
concept that deals with how much
demand varies according to changes in
price
9. Elastic Demand
Situation in which the rise or fall in a
product’s price greatly affects the amount
that people are willing to buy
10. Inelastic Demand
Situation in which a product’s price change
has little impact on the quantity
demanded by consumers
Examples of products that are elastic and
inelastic?
Does this relate to utility?
11. Ch 7, S2 Quiz
1. Explain why an increase in demand for
ethanol increases the prices of corn
2. What is one product for which you have
an elastic demand? Why is it elastic vs.
inelastic?
3. What does the demand curve look like?
