1.4 Demand

a. Define (using graphs as appropriate) the law of demand. b. Explain (using graphs as appropriate) the relationship between the price of a good or service and the quantity demanded.

• The law of demand states there is an inverse relationship between price and quantity demanded, leading to a downward-sloping demand curve.
• Enduring understanding MKT-2: In a competitive market, demand for and supply of a good or service determine the equilibrium price.

Explain (using graphs as appropriate) the determinants of demand.

• Factors that influence consumer demand, such as changes in consumer income, cause the market demand curve to shift.
• Enduring understanding MKT-2: In a competitive market, demand for and supply of a good or service determine the equilibrium price.