Introduction
Good day learners. Today we will be discussing about demand, as one of the topics under dynamics of markets.
There is the link below of a detailed information of what we will be discussing.
Task
Activity 1
A. Define each concept
- Demand (2)
- Market demand (2)
- Demand schedule (2)
- Demand curve (2)
B. Complete the following sentence by filling the missing word
The theory of demand study the behaviour of ___ (1)
C. Draw a labelled demand curve using the table below (10)
demand schedule for tomatoes at John spazza shop
|
Price of tomatoes (in rand) |
Quantity demanded |
|
R2.00 |
80 |
|
R4.00 |
60 |
|
R6.00 |
40 |
|
R8.00 |
20 |
|
R10.00 |
5 |
Process
DEMAND
Definition of Demand
- Demand refers to the quantity of goods and services that prospective buyers are willing to purchase at the given price within a given period of time.
Types of demand
Individual demand
-
- Individual demand is the demand of one person or one firm.
Market demand
-
- Market demand is the total quantity demanded by all consumers.
Demand schedule for Coca Cola at a school tuck-shop
|
PRICE OF ONE CAN OF COCA- COLA |
QUANTITY DEMANDED (CANS OF COCA COLA) |
|
R1.00 |
100 |
|
R2.00 |
80 |
|
R3.00 |
60 |
|
R4.00 |
40 |
|
R5.00 |
20 |
 |
A graphical presentation of the demand for Coca Cola Demand Curve
The law of demand
-
- As the price of a product increases the quantity demanded for the product decreases and as the price of the product decreases the demand for the product increases, ceteris paribus.
- This inverse relationship is known as the law of demand
The Principle of Ceteris Paribus
-
- The demand curve is a simplified way of indicating the relationship between quantity demanded and price.
- This is based on the assumption that all other determinants are constant (ceteris paribus).
Demand Curve
-
- A demand curve indicates the quantity of a product that is demanded at different prices.
- It slopes down from top left to bottom right. This indicates that the demand curve has a negative slope (gradient).
- It is the result of the inverse relationship between the price of a product and the quantity demanded of the product.
Factors that influence demand and quantity demanded
The price of the product
-
- Consumers are willing and able to buy more at lower prices, ceteris paribus.
The price of complements
-
- If the price of one complementary product increases, consumers will demand less of this product and use less of the other complementary product.
The price of substitutes
-
- If the price of a product increases, consumers will demand less of this product and instead demand more of its substitute.
The income of the consumer
-
- The higher the income of a consumer, the more money is available to spend on goods and the more the consumer will spend, ceteris paribus.
The tastes and preferences of consumers
-
- If a consumer prefers A to B, he will tend to buy more A than B, ceteris paribus.
The size of the household
-
- The larger the household, the greater the demand will be, ceteris paribus.
Expected changes in prices
-
- If consumers expect a price to change in the future, this influences their demand for the product concerned.
The weather conditions
-
- Demand for a product differs during the year depending on the season.
Movement ALONG the demand curve
 |
Show the price-quantity demand relationship.
-
- If the price is R5, the demand for the product is 20 units, if the price drop to R3 the quantity demand will increase to 60 units and if the price decrease further to R1 the quantity demand will increase to 100 units.
- This represents a movement along the demand curve.
Shift of the demand curve
 |
-
- A change in any factor other than price will cause the demand curve to shift to the right or the left.
-
- Shift to the right – quantity demanded increase
- For example: The market demand for umbrellas increases due to the winter rainy weather. This will cause an increase in the quantity demand for umbrellas. The demand curve will shift to the right.
-
- Shift to the left - quantity demanded decrease
- For example: The market demand for umbrellas decreases in the summer. This will cause a decrease in the quantity demand for umbrellas. The demand curve will shift to the left.
Reasons why the quantity demand increase/shift to the right
-
- An increase in the income of consumers
- An increase in the size of the population
- Quantity demanded increase because of advertising, fashion, climate change, consumer tastes.
Reasons why the quantity demand decrease – shift to the left
- A decrease in income
- Population size decreases
- Advertising, fashions, climate change, consumer tastes
For more clarification, follow the links below and watch these videos:
Evaluation
|
QUESTIONS |
MARKS |
|
A |
8 |
|
B |
2 |
|
C |
10 |
marking guide for questions c ( the graph)
|
LEVEL |
CRITERIA |
MARKS |
|
1 |
Correct plotting of axis ,Full labelled & accuracy |
8-10 |
|
2 |
Full Labelled, inaccuracy |
5-7 |
|
3 |
Incorrect plotting, not full labelled & inaccuracy |
2-4 |
Conclusion
Learners please make sure that you study and understand what we had just discussed which Demand and make use of the links that i provided for you so that you can get more information.
Our next lesson will be about SUPPLY
your participation is highly appreciated.
Teacher Page
if you encounter problems regarding this discussion you can email me on:
Mr. M. Ginyigazi