LESSON 16.5 What is meant by demand and supply in the market?
LEARNING INTENTION By the end of this lesson you should be able to describe the laws of demand and supply, and what is meant by a free market.
Tune in The year 2024 saw Taylor Swift tour Australia. She played a number of concerts around Australia with tickets selling for as much as $1249.90 for VIP tickets, $379.90 for A Reserve tickets and as little as $75.90 for seats with an obstructed view. FIGURE1 How much would you pay?
1. How was Taylor Swift able to charge these prices and sell out three concerts at the MCG, with each concert holding over 96 000 fans? 2. As a class, discuss why you think prices vary, how do ticket sellers determine what price to charge and how much would you pay for tickets? 3. Is there another artist you would pay more for a ticket to their show? 16.5.1 Demand The lawof demand simply states that the quantity of a particular good or service that consumers are prepared to buy is dependent on the price being charged, assuming other factors do not change. Hence:
• As the price increases, there is a reduction in the quantity demanded. • As the price decreases, there is an increase in the quantity demanded.
This relationship can be shown on a diagram known as a demand curve. This curve will show that as the price falls, the demand for a product will increase as more people can afford the product. The opposite will also be true.
562 Jacaranda Humanities Alive 7 Victorian Curriculum Third Edition
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