Demand
- IGCSE Economics
- Theme 2: The allocation of resources
Speaker notes: Introduce the topic and its relevance to the IGCSE Economics syllabus.
Learning Objectives
- Define individual and market demand.
- Explain movements along a demand curve.
- Analyze shifts of a demand curve.
Speaker notes: Outline what students will learn by the end of the lesson.
Starter: Think About This
- Why do some products sell out quickly while others do not?
Speaker notes: Encourage students to think about real-world examples of demand.
Individual and Market Demand
- Individual demand: quantity one consumer buys at different prices.
- Market demand: total quantity all consumers buy at different prices.
- Demand schedule: table showing prices and quantities demanded.
Speaker notes: Explain the difference between individual and market demand and introduce the concept of a demand schedule.
Demand Curve
- Graphical representation of a demand schedule.
- Price on y-axis, quantity on x-axis.
- Downward slope: inverse relationship between price and quantity.
Speaker notes: Show how to plot a demand curve and explain its downward slope.
Movements Along a Demand Curve
- Caused by a change in price.
- If price falls, quantity demanded rises (movement down the curve).
- If price rises, quantity demanded falls (movement up the curve).
Speaker notes: Explain that movements along the demand curve are due to price changes.
Factors Affecting Demand
- Income levels, tastes and preferences, prices of substitutes and complements, population changes.
Speaker notes: Introduce the factors that can cause a shift in the demand curve.
Shifts of a Demand Curve
- Caused by changes in factors other than price.
- Rightward shift: increase in demand.
- Leftward shift: decrease in demand.
Diagram explained
The diagram shows the market for a good. The vertical axis is price and the horizontal axis is quantity. The original demand curve and supply curve meet at the initial equilibrium price and quantity. An increase in demand, caused by a factor other than price such as higher income, shifts the demand curve to the right. At the original price there is now excess demand. The new equilibrium is at a higher price and a higher quantity.
- Start at the original equilibrium where the demand and supply curves cross.
- The demand curve shifts to the right because of a non-price factor.
- At the old price, quantity demanded exceeds quantity supplied.
- The market adjusts to a new equilibrium with a higher price and a higher quantity.
Speaker notes: Explain that shifts in the demand curve are due to changes in factors other than price.
Worked Example: Demand Curve
- Scenario: Price of a smartphone falls from £500 to £400.
- Step 1: Identify the initial and new price points.
- Step 2: Plot the new quantity demanded on the demand curve.
- Step 3: Draw a line from the old to the new point.
Speaker notes: Walk through an example of how a price change affects the demand curve.
Common Mistakes and Exam Tips
- Mistake: Confusing movements along the curve with shifts.
- Tip: Always label your axes clearly in exam questions.
- Tip: Use real-world examples to support your answers.
Speaker notes: Highlight common mistakes and provide tips for the exam.
Key Terms
- Individual demand, Market demand, Demand schedule, Demand curve, Movement along a demand curve, Shift of a demand curve.
Speaker notes: Review key terms and their definitions.
Plenary: Quick Check
- What is the difference between individual and market demand?
- How does a change in price affect the demand curve?
- What factors can cause a shift in the demand curve?
Speaker notes: Ask students to recall key concepts from the lesson.
Plenary: Summary
- Understand individual and market demand, movements along a demand curve, and shifts of a demand curve.
Speaker notes: Summarize the main points of the lesson.