2.1 Demand

• Demand shows the relationship between price and quantity demanded

• Quantity demanded usually falls as price rises, ceteris paribus

• Demand can be represented by a downward-sloping demand curve

• Diagram: downward-sloping demand curve

• Market demand is derived from individual consumers' demand

• Demand analysis distinguishes individual behaviour from total market behaviour

• Demand shifts with income, tastes and preferences, future price expectations, and number of consumers

• Demand also shifts with prices of related goods, including substitutes and complements

• A price change causes movement along a demand curve

• Non-price determinants shift the demand curve

• Diagram: movements along and shifts of the demand curve