Английский для Экономистов Агабекян данный файл принадлежит сайту www.crypower.ru

Date: 2015-10-07; view: 485.

Part_4_Lesson_3_Text 2 (Стр. 319 – 330)

THE LAW OF DEMAND

Demand is a consumer's willingness and ability to buy a product or service at a particular time and place.

The law of demand describes the relationship between prices and the quantity of goods and services that would be purchased at each price. It says that all else being equal, more items will be sold at a lower price than at a higher price.

Demand behaves the way it does for some of the following reasons:

More people can afford to buy an item at a lower price than at a higher price.

Let's see the law of demand from the point of ice-­cream selling

At a lower price some people will substitute ice-cream for other items (such as candy bars or soft drinks), thereby increasing the demand.

At a higher price some people will substitute other items for ice cream.

How many ice-creams can a man eat? One, two, more? Some people will eat more than one if the price is low enough. Sooner or later, however, we reach the point where enjoyment decreases with every bite no matter how low is the cost. What is true of ice-cream applies to most everything. After a certain point is reached, the satisfaction from a good or service will begin to diminish. Economists describe this effect as diminishing marginal utility. «Utility» refers to the usefulness of something. Thus «diminishing marginal utility* is the economist's way of describing the point reached when the last item consumed will be less satisfying than the one before.

Diminishing marginal utility helps to explain why lower prices are needed to increase the quantity demanded. Since your desire for a second ice-cream is less than it was for the first, you are not likely to buy more than one, except at a lower price. At even lower prices you might be willing to buy additional ice-creams and give them away.