The Law of Demand is that…
“as the price of a good falls, More the good will be demanded”
Case Study:
Torquay Tomatoes
A Devonshire farmer grows tomatoes for sale in a small farm
shop. They have analysed the volume of tomatoes they sell when they are priced
differently, and the information is show below:
Price of Tomatoes (per kg)
Kilos sold
£0.50
£1.00
£1.50
£2.00
£2.50
100
80
60
40
20
Use the graph paper below to plot a graph:
Price
2.50
2.00
1.50
1.00
0.50
0
20
40
60
80
100
Quantity Demanded
Complete these sentences…
A Demand curve usually slopes from _top_____________ to _Bottom_______________
(Hint: look at the one you drew…which direction does it slope??)
Using the data provided before…at a price of £1.25 per kilo, how many kilos of tomatoes will
Torquay Tomatoes sell?
_______________________50 tomatoes________________________________________
Torquay Tomatoes are likely to sell only 40 kilos of tomatoes if they charge how much?
_______________________________________________________________________
Looking at the diagram below, we can see how a change in price will affect the quantity
of a good that is demanded:
In summary - for most
goods, as the price
increases, the quantity
demanded decreases!
Price
P1
P
D
Q1
Q
Quantity Demanded