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Unit 1 Micro: Exercise on Market Demand
25th September 2011
I have attached in this blog a quick exercise on the determinants of market demand. There are twenty examples and students are asked to identify whether there is a movement or a shift in the demand curve and in which direction.
Demand is the quantity of a product that consumers are willing and able to buy at a given price in a given time period.
Individual demand relates to a single consumer in the market - e.g. your individual demand for iTunes downloads or pizza from Dominos
Market demand is the sum of demand from consumers in the market - e.g. the market demand for coffee beans comes from all of those agents who need to buy coffee perhaps for roasting into coffee beans or as another ingredient in food processing
The law of demand is that as price declines, the quantity demanded expands, and that as price rises, the quantity demanded contracts. (We see a movement along a demand curve)
Changes in factors other than the price of the product itself can bring about a shift in the level of demand at each prevailing price. These are known as changes in the conditions of demand. (We see a shift in the position of a demand curve)
Download the Market demand exercise using the link below
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.