1.2.2 Demand

Question 1

what happens when the price falls

Answer 1

extension in demand

Question 2

what happens when the price rises

Answer 2

contraction in demand

Question 3

what does the demand curve show

Answer 3

reflects the relationship between levels of price and quantity demanded

Question 4

why is the demand downward sloping

Answer 4

as the price lowers, more people are willing to buy the product

Question 5

what happens when there is a decrease in demand

Answer 5

the curve shifts to the left

Question 6

what happens when there is an increase in demand

Answer 6

the curve shift to the right

Question 7

what factors may cause a shift in demand curve (conditions of demand)

Answer 7

advertising
substitute goods
complementary goods
customers real income
a change in fashion

Question 8

the concept of diminishing marginal utility and how this influences the shape of the demand curve

Answer 8

because each additional unit of a good or service is put toward a less valuable use.

Question 9

what does a steep curve suggest

Answer 9

that the consumers are less responsive to the price

Question 10

what factors can lead to a steeper demand curve

Answer 10

necessity
brand loyalty
number of substitutes