So that's why I found myself sat in my economics classroom, just before lunch, doing an impression of a seven year old when she realises it's Christmas.... "Yesssssss!" (whilst pumping a single fist into the air). Truth be told, I didn't even hear what we were actually doing in the lesson, but the words 'coloured' and 'pens' ignited a spark deep within my soul.
So after a moment of deep contemplation as to which colours I should put where, I got to work on my first ever Demand Schedule. Yes, a proud moment indeed.
At a guess, you probably aren't reading this post to find out about my slight OCD for presentation, or my love of coloured pens. You're probably here to truly experience the meaning of 'The Demand Schedule', so I'll try my hardest to fulfil your thirst for knowledge.
As my notes say, "The demand schedule is one of the most widely used concepts in economics.... Blah blah blah"
In the most basic terms I can muster up, the demand schedule is the relationship between price per unit and quantity demanded. Simple, right? It gets a little harder, but I managed to continue the rest of the lesson with such basic and undetailed knowledge and a little pizazz from my coloured pens.
It was when I came to do the accompanying homework that my troubles really set in, so I faced the fact that I wouldn't be able to fly through economics A Level armed with nothing but a set of coloured pens (despite the fact that I possess multiple width nibs and a wide spectrum of colours).
So here are the five questions I asked myself in order to understand this topic further. Hopefully they're useful, if not then I don't know what to suggest...
Q1: So, what does this sneaky little demand schedule look like?
It can look like one of two things: a rectangular hyperbola, or a straight line (inversely proportionate, that is)
Q2: What is a rectangular hyperbola? Some kind of cross between hyperactivity and ebola?
Yes. Just kidding, but it doesn't have anything to do with rectangles, or over exaggeration, as it's name would suggest. It's basically a curved line that is constantly decreasing in gradient, never touches the x or y axes and never ever ever ever becomes flat (be that horizontal or vertical).
Q3: And what would cause movement along these lines?
A change in price.
Q4: What's the difference between movement along the demand schedule (moving from one end of the line to another) and a shift (when the positioning of the line changes entirely?)
Movement: increase in demand at a specific price (e.g if a sweater was featured in a magazine, the price wouldn't change, but more people would want to buy it... Ah, the power of print)
Shift: increase in quantity demanded at all prices (e.g cobalt blue is the new black, so no matter whether your new blue skinnys are Primark or Hudson, the price will go up on both items to make maximum profit from a new trending item)
Q5: Which variables can cause a shift in the demand schedule?
- A complementary good becoming cheaper/more expensive. A complementary good is an item that you'd buy in conjunction with the original good (e.g music for an iPod. If the price of music goes down, then more people are more likely to buy iPods, causing a rightward shift in the demand schedule. Likewise, if music became more expensive, then people would buy less iPods, or alternatively turn to illegal downloads... You see my point)
- A substitute good becoming cheaper/more expensive. A substitute good is one that you would buy instead of another (e.g if the iPhone 5 is raised in price by £100 (which would be unjustifiable, as it's already more expensive than its worth) then Samsung Galaxy sales would probably shoot up, causing a rightward shift in the demand schedule for Samsung's and a leftward shift (decrease) for iPhone sales)
- Increase/decrease in personal wealth (e.g if your father has just bought a super car (not mentioning any names...) then you probably won't have enough money for a new iPad, therefore causing a leftward shift in the demand schedule for iPads. Not that one purchase would make a dramatic difference, but you get the idea)
- Advertising. A good advert can boost sales by massive proportions (e.g 'Compare the Market' with that adorable yet slightly confusing little meerkat. There's no denying that the popularity of that advert lead to massive boosts in sales and also public knowledge of compare the market, as well as people trying to imitate that 'simples' catchphrase, therefore causing a rightward shift of the demand schedule for that website and a great deal of heartbreak and crushed dreams when children of all ages realised that they couldn't accurately imitate the meerkat... What's happened to humanity?)
I know what you're thinking (yep, I really am a mind reader now), why haven't I been able to see some of the glorious graphs (alliteration... The English department would be impressed) that I spent hours slaving over. Well, after a long period of staring at my iPad in disgust and confusion, I realised that I didn't know how to upload a picture. The mind is a wonderful thing, but google is better, and I think I've finally worked it out. Hallelujah!
The differences between a movement in the demand schedule and a shift....
And finally, a rectangular hyperbola, if my descripion didn't suffice (which I doubt it will have done...)
So, I hope you've learnt at least one of three things from this blog post: A) that I really like using coloured pens. B) that I'm quite old fashioned: I could have easily drawn those graphs on the computer but I prefer good old pen and paper. And finally, C) anything about the demand schedule. Hopefully you learnt C, but if you really didn't, then I suppose A will suffice.
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