# - Demand and Supply Demand How much of a good or service will be purchased by consumers over a period of time Discover what determines the demand

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1/21/2011 1 Demand and Supply Discover what determines the demand for goods and services by consumers, and the supply of goods and services by businesses. Lecture 5, Tuesday, January 24 Demand How much of a good or service will be purchased by consumers over a period of time? Demand example: Pizza Purchase Poll The good: PIZZA The consumers: THIS CLASS The period of time: NEXT 4 WEEKS How many pizzas will this class buy in a month? Demand for Pizza Price Quantity \$7 745 \$12 393 \$16 187 0 3 6 9 12 15 0 100 200 300 400 500 P Q 4 8 12 16 \$20 D 200 400 600 800 1000 Demand Slopes Down: The Law of Demand The more costly is a good, the less of it people will buy. Demand PRICE QUANTITY D is for DEMAND One of the determinants of Demand is Price.

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1/21/2011 2 Except. . . 1. Pizzas at \$12 2. Pizzas at \$7 3. Pizzas at \$16 19 people answered like this: 3 3 3 Pizza Purchase Poll Purchases don’t change with price! Perfectly Inelastic Demand PRICE QUANTITY D is for DEMAND “Elasticity” measures the response of one variable to another, like the response of quantity to price. Demand for Pizza
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## This note was uploaded on 04/25/2011 for the course AGEC 217 taught by Professor Deboer during the Spring '08 term at Purdue University-West Lafayette.

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- Demand and Supply Demand How much of a good or service will be purchased by consumers over a period of time Discover what determines the demand

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