Question

Price Quantity Demanded 1) The above table shows Jeff's demand schedule for coffee per week. Use the table to draw Jeff's demand curve for coffee. Make sure to label the axes. Price Quantity Demanded 6 | 9 112 2) The above table shows Lorissa's demand schedule for coffee per week. Use the table to draw Lorissa's demand curve for coffee. Make sure to label the axes. Price Quantity Demanded 3) Use the space above the draw the market demand curve based on Jeff and Lorissa' coffee demand 4) List what causes a change in demand and what causes a change in the quantity demanded. Diagrammatically, what is the difference between a "change in demand" and a "change in quantity demanded"?

Answer 1

3)

NOTES: 1EFFS DEMAND CURVE - Y COFFEE PRICE It water EL ol . 3 4 5 6 7 8 9 10 QUANTITY CUNITS) COFEEL PER WEEK LORISSAS DEMAND CURVE in COFFEE PRICE ( o 3 9 12 B QUANTITY OF COFFEE PER WEEK

Price($)	Quantity (Jeff's) (1)	Quantity(Lorrisa)(2)	Market demand(1)+(2)
5	1	0	1
4	3	3	6
3	5	6	11
2	7	9	16
1	9	12	21

Market Demand graph is shown below----

3) change in quantity demanded----- when the quantity demanded either expands or contracts due to change in its own price, it is called change in quantity demanded.Other factors affecting demand are held constant.

MARKET DEMAND FOR COFFEE 08.00 09. COFFEE PRICE ($) 6 11 12 15 16 18 21 MARKET "DEMAN DEMANDE 2009

Graph showing change in quantity demanded---

change in demand---- when demand increases or decreases due to change in some factors other than price, it is called change in demand.It is also called shift in demand curve.

NOTES: P JCHANGE IN QUANTITY DEMANDED ! MOVEMENT ALONG DEMAND CURVE! EXTENSION OF DEMAND PRICE FALL) CONTRACTION OF DEMAND PRICE RISE) CAUSED BY PRICE CHANGE CONTRACTION of EXTENSION DEMAND DEMANY PRICE PRICE(S) Q QUANTITY QUANTITY May 2009 F S S M W T T F S i T

The factors causing change in demand are-----

* Change in income of consumer

*Change in price of substitute good

* Change in price of complimentary good

*Future expectation of prices

* Change in taste or preference of consumer

* Number of consumers

* Advertisement expenditure

Graphs showing change in demand-------

NOTES: TCHANGE IN C UNE IN DEMANDY Moritu ISHIFT IN DEMAND CON INCREASE IN DEMANT DECREASE DEMANT a) SAME PRICE MORE DEMANY SAME PRICE LESS JEMAND 3214 *PRICE & 3) O QUANTIT? MORE PRICE, SAME DEMAND LESS PRICE, SAME DEMAND PRICE (PRICE & QUANTITY QUANTITY May 2009 T F S S M Anril 2009 M T W T F S

5)Explanation of factors affecting demand in relation to coffee example-----

*Suppose income of customer increases, he can buy more packets of coffee now ,though the price of coffee is same.It is income effect.

* Suppose the price of milk ( a complementary good) increases , now the demand for coffee will decrease even if the price is same.

* suppose, there is change in taste of people, now they prefer to have green tea, now the demand for coffee will decrease , though price remains same.

* Let us assume , the consumers expecting that in a few days ,the coffee prices will go down, expecting this , they will presently stop buying coffee only to buy in coming days , this way future expectation pf price affects demand.

* A sudden increase in number of consumers in an area increases the demand in that particular area and viceversa.

* Suppose , I saw an advertisement of a perfumed soap in TV, I started buying that soap and stopped buying my previous soap, it is the effect of advertisement ,which affected my demand.

* Sometimes , a seasonal demand plays a major role ,for example demand for air conditioners in summers is high .

* One of my friend suggested me to go for detox water instead of taking coffee, now I have stopped buying coffee, it is due to change in my preferences.

6)The law of demand refers to thefact that, other things remaining the same, when price of a good falls----

c) there is a movement down along the demand curve to a larger quantity demanded.

7) The law of supply refers to the fact that other things remaining the same, when price of the rises

e) there is a movement up along the supply curve to a greater quantity supplied.

8)the supply of coffee would decrease ----

c) the price of coffee beans increases.

9) The above examples do the same.