Economics Principles & Practices

Chapter 4: Demand

Chapter Overviews

The Law of Demand states that people will buy more of a product at a lower price than they will buy at a higher price, if nothing else changes. Demand does not always stay the same. There are a number of factors that will cause demand to either increase or decrease. Among the determinants of demand are tastes, income, and the price of related products.

As you read, keep in mind the difference between a change in demand and a change in the quantity demanded. A change in demand is a result of a change in the determinants of demand. A change in the quantity demanded is a result of a change in price.