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You are here: Home > Learning Materials > Economics > Markets > The Market Mechanism > Demand Curve Worksheet |
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| Price | Cans bought |
| 60p |
? |
| 50p |
? |
| 40p |
? |
| 30p |
? |
| 20p |
? |
5. Draw a graph putting price on the 'y' (vertical) axis and number of cans bought on the 'x' axis (horizontal).
6. Now ask five of your friends how many they buy at each price and record your results:
| Price | A | B | C | D | E | Total |
|---|---|---|---|---|---|---|
| 60p |
||||||
| 50p |
||||||
| 40p |
||||||
| 30p |
||||||
| 20p |
7. Now draw a graph similar to question (5) except the total number of cans bought is plotted against each price.
8. Can you explain the shape of the curve?
9. Suppose now your income doubles. How would this affect your answers to questions (1) to (5)?
10. What has happened to the curve now your income has doubled?
11. Suppose a survey shows that drinking coke causes young people to sweat more and have a greater chance of getting spots! How would this affect your answers to questions (1) to (5)?
12. What has happened to the curve as a result of this survey?
13. Using demand curves show the effect on the demand for chocolate of:
a) an increase in price
b) a fall in income
c) a successful advertising campaign 'Eat more Choc'.
Q1 If a student indicates they do not like fizzy drinks ask them to 'play the game' and pretend that they do.
Q2 to Q5. Expect a range of responses.
Fig 1 is the most typical with a stepped downward sloping demand curve.
Fig 2 offers a useful opportunities of establishing why a student exhibits perfectly price inelasticity of demand in their own purchasing of coke.
Fig 3 is an unusual response for an individual student
Fig 4 sometime happens - the student for whom coke is a giffen good.
Q 6 Now ask five of your friends how many they buy at each price and draw a graph of your results:
| Price | A | B | C | D | E | Total |
| 60p |
1 |
2 |
1 |
2 |
0 |
3 |
| 50p |
2 |
3 |
1 |
2 |
0 |
8 |
| 40p |
2 |
4 |
1 |
3 |
2 |
12 |
| 30p |
3 |
5 |
1 |
3 |
3 |
16 |
| 20p |
5 |
5 |
1 |
5 |
6 |
22 |
The above table reflects a typical group response. Note that in deriving a 'market' (of five consumers) the demand curve often ends up as a classical textbook downward sloping curve. Often a near rectangular hyperbola, that is, unitary price elasticity. Why?
Q7 This is useful in getting students to identify the relationship between price and quantity demanded.
Q8 Typically students exactly double their purchase of coke. Why? Does coke have unitary income elasticity of demand or are students being a little mechanical in their thinking
Q9 & 10 Students have the opportunity to begin to identify the type circumstances in which there are movements up and down a curve and shifts in a curve
Q11 & 12 A bit risqué but an example of a change in a condition of demand
Q13 A chance to apply principles to a problem.
