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    2.2 Determinants of Demand Exercise

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    贾子渲
    The document discusses the determinants of demand through the example of demand for energy drinks. It defines demand and illustrates the inverse relationship between price and quantity demanded using data in a table. It then explores how this relationship would be affected by changes in the prices of substitutes and complements as well as changes in tastes, expectations, and market size - all of which are determinants of demand. An increase in demand is distinguished from an increase in quantity demanded.

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    2.2 Determinants of Demand Exercise

    Uploaded by

    贾子渲
    59 views4 pages
    The document discusses the determinants of demand through the example of demand for energy drinks. It defines demand and illustrates the inverse relationship between price and quantity demanded using data in a table. It then explores how this relationship would be affected by changes in the prices of substitutes and complements as well as changes in tastes, expectations, and market size - all of which are determinants of demand. An increase in demand is distinguished from an increase in quantity demanded.

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    2.2_Determinants_of_demand_exercise (2)

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    The document discusses the determinants of demand through the example of demand for energy drinks. It defines demand and illustrates the inverse relationship between price and quantity demanded using data in a table. It then explores how this relationship would be affected by changes in the prices of substitutes and complements as well as changes in tastes, expectations, and market size - all of which are determinants of demand. An increase in demand is distinguished from an increase in quantity demanded.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views4 pages

    2.2 Determinants of Demand Exercise

    Uploaded by

    贾子渲
    The document discusses the determinants of demand through the example of demand for energy drinks. It defines demand and illustrates the inverse relationship between price and quantity demanded using data in a table. It then explores how this relationship would be affected by changes in the prices of substitutes and complements as well as changes in tastes, expectations, and market size - all of which are determinants of demand. An increase in demand is distinguished from an increase in quantity demanded.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    The Economics Classroom

    2.2 The determinants of demand 

    Introduction: ​The table below show the quantities of energy drinks demanded at a range of
    prices. Study the table and answer the questions that follow.

    Quantity
    Price ($)
    (‘000s)
    10 1
    9 2.5
    8 4
    7 5.5
    6 7
    5 8.5
    4 10
    3 11.5
    2 13
    1 14.6
    0 16

    Part 1 - the Law of Demand:


    1. Define ​demand​.

    2. Describe the relationship between the price of energy drinks and the quantity demanded
    as shown in the table.

    3. What explains this relationship?

    4. Plot the data in the table on the graph below, with ​price​ on the vertical axis and ​quantity
    on the horizontal axis.
    The Economics Classroom

    5. Plot a point on the graph showing the quantity of energy drinks demanded at $5.
    Illustrate each of the following and identify the change that could cause it to happen:

    a. A movement upwards and to the left along the curve.

    b. A movement downwards and to the right along the curve.

    Part 2 - the Determinants of Demand:

    6. Assume that soda prices are falling. For most consumers, soda is a close substitute for
    energy drinks. Explain how this will affect the quantities demanded at each of the prices
    The Economics Classroom

    in the table above?

    7. Fill in the table below assuming the decrease in the price of soda caused a decrease
    decrease in the quantity of energy drinks demanded of two units at each of the prices in
    the original table:

    Quantity
    Price ($)
    (‘000s)
    10
    9
    8
    7
    6
    5
    4
    3
    2
    1
    0

    8. Draw a new demand curve, showing the effect of the decrease in soda prices.

    9. Besides a decrease in the price of a substitute good, identify one example of a change in
    The Economics Classroom

    each of the following determinants of demand for energy drinks that could lead to a ​fall in
    demand for energy drinks:

    a. The price of a complementary good:

    b. The tastes of consumers:

    c. Consumer expectations:

    d. Size of the market:

    10. Discuss four factors that could cause the demand for energy drinks to ​increase​. Illustrate
    an increase in demand in the graph you drew in number 8.

    11. Distinguish between an ​increase in demand​ and an ​increase in the quantity demanded
    for energy drinks. Do these concepts mean the same thing? Why or why not?

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