This document summarizes key concepts from an economics chapter about demand, including: 1) It defines demand as a consumer's willingness and ability to purchase a product over time, while quantity demanded refers to a specific price. 2) It states that the law of demand says that as price increases, quantity demanded decreases, and vice versa. 3) Demand schedules and curves illustrate the relationship between price and quantity demanded graphically. 4) It identifies factors that can shift the demand for a product such as consumer tastes, income, and prices of substitutes.

1. Economics Chapter 3
Demand
3.1, 3.2, 3.3

2. How does demand differ from the
quantity demanded?
• Demand is at various prices while quantity
demanded is at one particular price.
• Demand: the consumer is willing AND able to
buy the product and the demand for the product
must be examined over a certain time frame.

3. What does the law of demand state?
• The relationship between the quantity
demanded and the price is inverse.
▫ Price is up, quantity demanded is down
▫ Price is down, quantity demanded is up.

4. What do demand schedules and
demand curves illustrate?
• They show the relationship between price and
quantity demanded.
• Demand schedule: shows various prices in a
certain amount of time to get the price at which
the most profit is earned.
• Demand curves: plots the information on a
graph.

5. What does it mean for a products
demand to shift?
• It means there was a change in any
determinant of demand.
• Makes the graph shift left or right.

6. What factors can shift demand for a
product?
• Consumer tastes and preferences,
• Market size,
• Income,
• Prices of related goods, and
• consumer expectations.

7. How do substitute goods differ from
complementary goods?
• Complementary goods are used with other
goods, ex. Chocolate syrup and milk.
• Substitute goods are substitutes for the real
thing (usually at a cheaper price.) “the store
brand”

8. What is demand elasticity?
• The degree to which changes in a goods price
affect the quantity demanded by consumers.
▫ Like a rubber band: you pull back harder, the band
swings back into place harder.

9. What is the difference between elastic
and inelastic demand?
• Elastic demand: when the demands price change
leads to a significant change in quantity
demanded.
• Inelastic demand: the opposite. The demands
price has little effect on its change in quantity
demanded.
• The difference is the effect of the price on the
good.

10. How is elasticity of demand measured?
• The total revenue test: (total receipts)
monitoring any changes in a markets revenue
before and after changes in price of a product.

11. Credits
• Picture:
"E101ch910." E101ch910. N.p., n.d. Web. 24 Aug.
2012.
<http://www.oswego.edu/~atri/e101ch910.html>
.
• Information:
Pennington, Robert Leroy. Holt Economics.
Austin,Texas: Holt, Rinehart and Winston, 2003.
Print.