Demand is a type of want that is surveyed by the consumer. Quantity demand is the amount of want that is determined by the consumer. Quantity demand and demand are defined by a demand model in our classroom textbook, Economics of Health and Medical Care (6th Edition), written by Lanis L. Hicks that factors affect such as price and income. A model is stated in the textbook to aid in recognizing patterns to make prediction or decisions. In the case of determining quantity demand and demands, “If factor x increases, then demand or quantity demanded will increase (or decrease, depending on what factor x is) (Hick 2016).”
There are four categories; income, prices of other goods and services, tastes and expectation. These categories are considered when assessing the change in demands to assure that our organization can remain consistent with the changes in healthcare. Income is related to demand. Per the textbook Economics of Health and Medical Care (6th Edition), written by Lanis L. Hicks, “if income increases, the quantity demanded at each price will be greater if the good or service is a normal good. If the good or service is inferior, then the increase in income will result in a decrease in demand, other factors being equal (Hick 2016).” Prices of other goods and services are related to the demand for the good or service. Price is influenced by the quantities which are influences by their prices. “The demand for a particular good or service is also influenced by the quantities of related goods and services consumed. The quantities of these related goods and services are, in turn, influenced by their prices (Hicks 2016).” Taste is also known as wants and consumer wants influence demand. “The elements that influence the intensity of an individual’s desire for medical care include health status, educational background, gender, age, race, and upbringing (Hicks 2019).” Expectations impact current demand because it may impact future demands. If consumers expect their incomes to be higher in the near future, then they may purchase more goods and services currently and save less (Hicks 2016).”
Hicks, L. L. (n.d.). Economics Of Health and Medical Care.
(Zimmer,2017)Demand refers to the quantity of a product or service desired by consumers at a certain price. The higher the price, the less a certain product or service is demanded. This inverse relationship between price and quantity demanded is known as the law of demand, which influences many concepts and rules in economics. The demand curve is a graphical representation of the law of demand and reflects consumers’ willingness to pay for a certain product or service.
Understanding the difference between a change in demand and change in quantity demanded is a key concept in economics. A change in quantity demanded results from a change in price and moves along the demand curve. The only factor that influences quantity demanded is price. For example, let’s suppose that the price of a banana at the local farmers market is $1 per pound, and the quantity demanded at this price is 100 bananas. The following day, the seller increases the price of a banana to $2 per pound, and the quantity demanded decreases to 50 bananas. The increase in price from $1 per pound to $2 per pound led to a decrease in quantity demanded along the demand curve.
Sometimes, factors other than price can cause a change in demand, leading to a shift in the demand curve. Depending on the factor, a demand curve can either shift left, leading to a decrease in quantity demanded, or right, leading to an increase in quantity demanded. Common factors that can cause a shift in the demand curve include a consumer’s income, age, gender and personal characteristics. A shift in the demand curve may also result from a change in weather, the introduction of competing products, or an external event, among others.
(Zimmer,2017)Let’s return to the banana vendor at the local farmers market. Similar to the previous scenario, the price of a banana is $1 per pound, and the quantity demanded at this price is 100 bananas. However, the following day a report is published that finds pesticides used on bananas can cause lasting health problems. As a result, the quantity demanded shifts from 100 bananas to 20 bananas. Although the price stayed at a constant $1 per pound, the report adversely affects demand and causes a shift in the demand curve.
In summary, a decrease in quantity demanded is the result of an increase in price. The decrease in quantity demanded moves along the demand curve but does not shift the curve itself. A shift in the demand curve is reserved for factors other than price that influence consumers’ willingness to pay. A decrease in demand results from the presence of a factor that shifts the demand curve to the left such as a damaging study or introduction of a competing product.
(Zimmer,2017) Explain the difference between demand & Decrease in Demand& Decrease in Quanitity Demanded
Distinguish between demand and quantity demanded. What determinants cause a shift in demand?
Demand is a service or something that is wanted, or desired by consumers at a certain price. When the price is too high, the less of a demand for that product. The relationship between price and quantity demanded is also known as the law of demand. The law of demand in turn has a huge influence on economical rules. Here is how it works from an economical standpoint: When there is a change in quantity demanded this results in a change in price, price is the only thing that influences quantity. Here is how it works, an item is priced at one dollar per pound, (fruit, nuts, doesn’t matter what), and the quantity demanded is 100 items. If the following day the price is increased to two dollars per pound, and the quantity decreases to 50 items, the increase in price simply led to a decrease in quantity demanded along the demand curve. Often there are other factors that influence and cause a shift in demand, things that cause a shift to the left of the demand curve, or to the right are things such as, income, age, gender, and personal characteristics. External changes can cause a shift too even weather, connection between products, do they complement one another, too much of one thing without the complementary items that correlate. Competitors in the local area and what they offer. (Beggs & Harvard University)
Another scenario is, lets say he hospital buys a piece of equipment that helps patients with monitoring their health, and the demand is 100 per day, 10 dollars per device, however a report comes out that states the device may be harmful to the consumer and there are reports that people are getting ill (which may or may not be correlated to the device) as a result, the demand plummets from 100 to 20. Although the price remains, the report caused an adverse shift in the demand curve.
To conclude and summarize, the decrease in quantity demanded is an increase in price. The decrease in quantity demand moves along but does not shifts the curve. A shift is allocated not by the price, but by extenuating factors other than price that influence consumers willingness to pay. Competition or bad press can result in a shift to the left of the demand curve causing a decrease in demand. (Beggs & Harvard University)
Beggs, J., & Harvard University. (n.d.). The 5 Determinants of Economic Demand. Retrieved June 21, 2019, from https://www.thoughtco.com/the-determinants-of-demand-1146963