AP Macroeconomics / Unit 1: Basic Economic Concepts
1.4 Demand
Notes
Law of demand: as price rises, quantity demanded falls.
- A price change moves along the curve.
- Shifters: income (normal/inferior), tastes, prices of related goods (substitutes, complements), expectations, number of buyers.
Practice
The price of a good falls. This causes:
Price moves along the curve.
The price of hot dogs rises. Demand for buns (a complement):
People buy fewer hot dogs.
Income rises and demand for bus rides falls. Bus rides are:
Demand falls with income.
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