2. DEMAND refers to the entire
relationship between the quantity of a good
or service that buyers wish to purchase and
the price of that good or service. There is a
demand for a good or service if it gives
pleasure/satisfaction or if it meets a
need. The quantity demanded of a
commodity depends on the price of the
commodity depends on the price of the
commodity.
3. For example, when a student is thirsty, he/she
would go to the canteen to buy something to drink.
Suppose that among available drinks in the
canteen, she decided to buy mineral water. She
chose to buy the small plastic bottle because she
saw that the price matches the amount of money
she has in her possession. There is, therefore, a
demand for mineral water. There must have been
other drinks in the canteen which she wanted to
buy but she did not because her money was just
enough to buy the said mineral water.
4. Law of Demand – states that
other things being constant, an
increase in the price of a good lowers
the quantity demanded of that
particular good while a decrease in the
price of a good raises the quantity
demanded of that good. Thus, price
and quantity demanded move in
opposite directions.
5. Demand Schedule- a table that
shows the quantity of a good that
buyers would purchase at each price.
Demand Curve- the numerical
data in the demand schedule can be
drawn by means of a graph, or in other
words it is the graphical illustration of
the demand schedule.
7. INCOME:
Those with higher income can buy more
goods and services than those with the opposite.
Therefore, a buyer’s income has a great effect on
a demand.
POPULATION:
When population increases, it is expected
that demand for all kinds of goods and services will
also increase. Therefore, if a population is large,
the market is also large.
8. TASTE:
Otherwise called as the ‘taste of the consumers’,
taste varies with age, gender, situation or need, habit, and
weather.
For example, hot weather increases the demand or
need for cool drinks like iced tea, halo-halo, and fruit
shakes.
PRICE OF RELATED GOODS OR COMMODITIES:
Goods can be classified as either substitutes or
complementary. Flashlights & batteries, writing pads &
pens ARE examples of COMPLEMENTARY goods WHILE
soda & juice and bread & butter ARE examples of
SUBSTITUTE goods.
9. EXPECTATIONS OF BUYERS:
If buyers expect prices of basic
commodities to rise, some of them will buy
more than what they need at present in
order to take advantage of the lower price.
Demand is also affected when buyers
expect income to rise. Even before the
actual rise in income, expectation about
future income raises present consumption.
10. CHP Series
ECONOMICS: Basic Principle,
Applications and Issues (Textbook for Fourth
Year, Updated Version)
Published and printed by VIBAL
Publishing House, INC. 1253 Gregorio
Araneta Avenue, Quezon City
Electronic Conversion by Vibe
Technologies, Inc.
