1. The Theory of Market Demand
Demand is the quantity of a product that consumers are willing and able to buy at a given price in a given
time period.
Individual demand relates to a single consumer in the market - e.g. your individual demand for iTunes
downloads or pizza from Dominos
Market demand is the sum of demand from consumers in the market - e.g. the market demand for coffee
beans comes from all of those agents who need to buy coffee perhaps for roasting into coffee beans or as
another ingredient in food processing
The law of demand is that as price declines, the quantity demanded expands, and that as price rises, the
quantity demanded contracts. (We see a movement along a demand curve)
Changes in factors other than the price of the product itself can bring about a shift in the level of demand
at each prevailing price. These are known as changes in the conditions of demand. (We see a shift in the
position of a demand curve)
Exercise on the determinants of demand
Demand for? Change in the market Movement (i) For a (ii) For a shift
along curve movement - in demand -
or shift in the expansion or increase or
demand contraction? decrease?
curve?
Demand for London A rise in the level of the
Underground tickets London congestion charge
from £8 to £15
Demand for alcohol The local council introduces
in Edinburgh pubs a ban on “Happy Hours”
and 2 for 1 deals
Demand from the A fall in the average level of
UK for foreign real incomes for UK
holidays to Turkey households
The UK market A rise in the average price
demand for new of second-hand cars in the
cars UK
The demand for A fall in the retail price of
memory cards entry-level digital cameras
Demand for organic, A rise in the cost of
free-range chicken supplying organic free-
range chicken to
supermarkets
Demand for Unseasonally warm spring
Tennentʼs lager weather in Scotland
Demand for Harris Rising incomes in emerging
Tweed suits market countries

2. Demand for? Change in the market Movement (i) For a (ii) For a shift
along curve movement - in demand -
or shift in the expansion or increase or
demand contraction? decrease?
curve?
Demand for film A fall in the cost of
DVDs bought in subscriptions to LoveFilm
store and iTunes
Demand for Rising prices for crude oil in
Hummers (SUV) world markets
Demand for A glut of potatoes is
potatoes available following an
exceptional harvest
Demand for rented Government announces a
property in London fall in the number of
migrants living and working
in London
Demand for cigars A rise in the price of cigars
because of a higher tax
Demand for fridge Expectations grow of a
freezers double-dip recession for the
UK in 2012
Demand for electric A summer heatwave .....
fans fails to appear as forecast!
Demand for Official figures show that life
hearing-aids expectancy is rising and is
expected to continue doing
so
Demand for electric A rise in the average level of
fans household electricity bills
due to higher world energy
prices
Demand for beef Expectations among
steak consumers that prices will
rise significantly in the
coming weeks
Demand for cinema Orange continues to provide
tickets on a a Orange 2 for 1 offer into
Wednesday evening 2012 and 2013
Demand for brick- Construction companies
layers report an upturn in expected
sales and new house-
building