AP Microeconomics 2.1: Demand

Explain how buyers respond to prices, incentives, and constraints, then distinguish movements along demand from shifts in demand.

Covered syllabus points

MKT-3.A—a. Define (using graphs as appropriate) key terms and factors related to consumer decision making and the law of demand. b.…MKT-3.B—Explain (using graphs as appropriate) buyers’ responses to changes in incentives and constraints

[Maximum number: 1]

In the local market for Good X, there are four individual buyers: Emily, Wu, Omar, and Fernanda. The quantities that each individual buyer would be willing and able to purchase at different prices are included in the table provided.

Table for Question 2.1 Demand question 1 — AP Microeconomics

Could Emily's marginal benefit for the second unit of Good X equal $4.50 ? Explain.

[Maximum number: 1]

Soja Farm is a typical profit-maximizing firm that produces and sells soybeans in a constant-cost, perfectly competitive market that is in long-run equilibrium. The market equilibrium price of soybeans is $ 14 per bushel.

Soybeans are used as an input in the production of tofu. Tofu now becomes a more popular food option among consumers. On your graphs in part (a), show the short-run effect of the increased popularity of tofu on each of the following.

The new market equilibrium price and quantity of soybeans, labeled $\mathrm{P}_{2}$ and $\mathrm{Q}_{2}$ , respectively

(i) The market graph from part (a) must show a rightward shift of the market demand curve and the new equilibrium price labeled $\mathrm{P}_{2}$ and the new equilibrium quantity labeled $\mathrm{Q}_{2}$ .

Figure for Answer to Question 2.1 Demand question 2 — AP Microeconomics

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Covered syllabus points

2.1 Demand question 1

2.1 Demand question 2