【正文】 hings remaining the same, brings a decrease in the quantity demanded and a movement up along the demand curve. A fall in the price, other things remaining the same, brings an increase in the quantity demanded and a movement down along the demand curve. Demand 169。 2020 Pearson AddisonWesley Demand Curve and Demand Schedule The term demand refers to the entire relationship between the price of the good and quantity demanded of the good. A demand curve shows the relationship between the quantity demanded of a good and its price when all other influences on consumers’ planned purchases remain the same. Demand 169。 and the lower the price of a good, the larger is the quantity demanded. The law of demand results from ? Substitution effect ? Ine effect Demand 169。 2020 Pearson AddisonWesley If you demand something, then you 1. Want it, 2. Can afford it, and 3. Have made a definite plan to buy it. Wants are the unlimited desires or wishes people have for goods and services. Demand reflects a decision about which wants to satisfy. The quantity demanded of a good or service is the amount that consumers plan to buy during a particular time period, and at a particular price. Demand 169。 2020 Pearson AddisonWesley What makes the prices of oil and gasoline double in just one year? Will the price of gasoline keep on rising? Are the oil panies taking advantage of people? Some prices rise, some fall, and some fluctuate. This chapter explains how markets determine prices and why prices change. 169。3 DEMAND AND SUPPLY 169。 2020 Pearson AddisonWesley 169。 2020 Pearson AddisonWesley A market is any arrangement that enables buyers and sellers to get information and do business with each other. A petitive market is a market that has many buyers and many sellers so no single buyer or seller can influence the price. The money price of a good is the amount of money needed to buy it. The relative price of a good— the ratio of its money price to the money price of the next best alternative good— is its opportunity cost. Market and Prices 169。 2020 Pearson AddisonWesley The Law of Demand The law of demand states: Other things remaining the same, the higher the price of a good, the smaller is the quantity demanded。 2020 Pearson AddisonWesley Substitution Effect When the relative price (opportunity cost) of a good or service rises, people seek substitutes for it, so the quantity demanded of the good or service decreases. Ine Effect When the price of a good or service rises relative to ine, people cannot afford all the things they previously bought, so the quantity demanded of the good or service decreases. Demand 169。 2020 Pearson AddisonWesley Figure shows a demand curve for energy bars. Demand 169。 2020 Pearson AddisonWesley Willingness and Ability to Pay A demand curve is also a willingnessandabilitytopay curve. The smaller the quantity available, the higher is the price that someone is willing to pay for another unit. Willingness to pay measures marginal benefit. Demand 16