Concepts
- Law of Demand
- Income Effect
- Substitution Effect
- Law of Diminishing Marginal Utility
- Individual and Market Demand Curves
- Movement Along the Existing Demand Curve vs. Shifting the Demand Curve
- Change in Quantity Demanded
- Change in Demand
- Determinants of Demand
- Change in Preferences (Tastes)
- Change in Income
- Inferior Goods
- Normal Goods
- Change in Expectations
- Change in the Number of Buyers
- Change in the Price of a Related Good
- Substitutes
- Complements
Overview
In this lesson, we learn about how consumers demand output/buy finished products in product markets. According to the law of demand there is an inverse relationship between the price of a product and the quantity demanded by consumers. We learn about how the income effect and substitution effect explain why this inverse relationship exists. We also learn about the difference between an individual’s demand curve and the market’s demand curve. We conclude by addressing the most important concept from this lesson, the difference between quantity demanded (Qd) and Demand (D). We learn how to observe these differences on a graph and how inside influences affect Qd and how outside influences affect D.
Materials
Lecture
Demand 1
Demand 2
Demand Lecture
Quiz
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