The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium Demand: It is a schedule or a curve that shows the various amounts of a product that consumers are will willing and able to purchase at each of a series of possible prices during a specific period of time.

Demand schedule

Demand Curve

Low of Demand Other things equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls.

Negative or inverse relationship between price and quantity demanded.

Why the Inverse Relationship? Price Effect

Income Effect

Substitution Effect

Market Demand

Change in Demand

Factors that Effect DemandIncome Taste Number of BuyersPrice of Related Goods: Substitute goods , commentary goodsConsumer expectations Change in Quantity DemandedExplain with example and show graphically