demand

demand is the quantity of a good that consumers are not only willing to purchase, but also have the capacity to buy at the given price per unit of time. for example, a consumer may be willing to purchase2 kg  of potatoes if the price is $0.75 per kg. but, the same consumer may be willing to purchase only  1 kgif the price is $1.00 per kg.

2-2.      demand schedule

a demand schedule can be built that shows the quantity demanded at each given price.

demand schedule

it can be represented on a graph as a line or curve by drawing the quantity demanded at each price. it can also be described mathematically by a demand equation.

2-3. demand curve

the general form of a demand curve is that it is downward sloping. because that negative relationship between price of goods and there quantities.

2-4. special cases of a demand curve

the demand curve for most, if not all, goods fits to this principle. there may be unusual examples of goods that have upward sloping demand curves. a good whose demand curve has an upward slope is known as a  giffen good.

2-5. aggregate demand

·            aggregate demand  is the total demand for final goods and services in the economy (y) during a specific time period.

·            an aggregate demand curve is the sum of individual demand curves for different sectors of the economy.

·            the aggregate demand equation has five main parts:

  where

c: is consumption,

i: is investment,

g: is government spending,

nx: is net export,

x: is total exports, and

m: is total imports.

2-6.  caused of change in demand:

a change in demand for a product can be caused by many factors.  below are a few of the most common.

• population changes  – an increase in population increases the demand for food and other products, shifting the curve to the right.
• demographic changes  – the ageing population in any country will affect the demand of many products.  for example, the demand for health care will increase, shifting the curve to the right.
• tastes and preferences  – in recent years, health concerns have had a major effect on the preference for various types of food products.
• rising incomes  – increasing income levels in developing countries increases the demand for food, shifting the demand curve to the right.
• income  distribution  – the rising income disparity in the  u.s.  has increased the demand for high value/expensive products by high income consumers while having little effect on the product demands of middle income consumers.
• substitute products  – because beef, lamb and poultry are all meat products, what happens in one product affects the others.  a disease problem in the poultry product that reduces the supply of poultry will shift the demand curves for beef and lamb to the right.