1.3.1 Demand

Question 1

Define demand?

Answer 1

The quantity of a good or service that people are willing and able to buy at a given price at a given time.

Question 2

Define the term market?

Answer 2

any medium in which buyers and sellers interact and agree to trade at a price

Question 3

What do type of goods do consumers demand?

Answer 3

goods that maximise their satisfaction

Question 4

Why do consumers weigh up opportunity costs of each purchase and any potential trade-offs?

Answer 4

To help them decide which product will benefit them the most, given their limited income and the price of the good or service.

Question 5

In demand what type of relationship does price and quantity have?

Answer 5

Inverse- meaning when one rises the other one falls

Question 6

What does the demand curve show?

Answer 6

The relationship between price and quantity

Question 7

What is the crucial thing to remember about price and demand?

Answer 7

A change in price DOES NOT shift demand. A change in demand can lead to a change in price

Question 8

What factors can cause a shift in the demand curve?

Answer 8

• Changes in real income
• Changes in tastes and fashion
• Change in the price of substitutes
• Change change in the price of compliments
• Changes in size and age distribution of the population
• Advertising and branding