Demand versus Quantity Demand

Describe quantity demanded graph

changes in the points of the demand curve

Describe level of demand graph

Changes in the entire demand curve ( left or right)

Example of the graphs

Define quantity demanded

the amount that the consumer is willing and able to buy at the specified price

Define demand

the set of quantities demanded at various prices, all other casual factors held constant

Define out-of-pocket price

the price paid directly by consumers for a particular unit of the good or service

Define all other factors

those variables other than price that influence consumer demand behavior

Describe the endogenous variable

1. Quantity demanded: the amount that the consumer is willing and able to buy at the specified price

2. Price

3. Movement between two points on the demand curve

Describe the exogenous variables

1. The set of quantities demanded at various prices all other casual factors held constant

2. Taste, income, substitute goods, etc

3. The entire demand curve shifts to the left or right

What are things that can cause a change in the demand

1. Endogenous variable: out-of-pocket price causes a movement along a given demand curve, or a change in quantity demanded

2. Exogenous variables cause a shift in the entire demand curve, or a change in demand

3. Prices of other related good and services

4. Income

5. Tastes

6. Expectations

What does it mean when there is a shift of the demand curve to the left

decrease in demand

What does it mean when there is a shift of the demand curve to the right

There is an increase of demand

Practice Question: The demand for a product increased. Which way will the demand curve shift

right

Practice question: The demand for a product decreased. Which way will the demand curve shift?

a) right

b) left

b) left

Practice Question: The price of a product increased from $4 a box to $5 a box. How will this change demand?

a) the quantity demanded of the product will increase

b) the quantity demanded of the product will decrease

c) the demand for the product will decrease

d) the demand for the product will increase

b) the quantity demand of the product will decrease

Practice Question: The income of a person decreased. Nothing else changed. Which of the following would be changed?

a) demand or level of demand

b) quantity demanded

a) demand or level of demand

a) quantity demanded

a) demand or level of demand