5 Demand

Question 1

Demand

Answer 1

A consumer’s willingness and desire to purchase goods and services at a specific price

Question 2

Individual demand

Answer 2

one consumer’s willingness and ability to purchase goods and services at a given price

Question 3

Market demand

Answer 3

the sum of all consumer’s willingness and ability to purchase goods and services at a given set of prices

Question 4

Demand curve

Answer 4

Relationship between the price of product and the quantity demanded by the market

Question 5

Joint demand

Answer 5

When products are demanded together - they are complements

Question 6

competitive demand

Answer 6

When consumers demand one or the other product - the products are substitutes

Question 7

composite demand

Answer 7

When a product is demanded for multiple possible uses

Question 8

Movement along the demand curve

Answer 8

Change in the quantity demanded that results from a change o the price of a product

Question 9

Contraction in demand

Answer 9

when there is an increase in price which decrease the quantity demanded

Question 10

extension in demand

Answer 10

when there is an decrease in price which increase the quantity demanded

Question 11

Increase in demand

Answer 11

A shift outward of the demand curve so that there is an increase in the quantity demanded at every price

Question 12

decrease in demand

Answer 12

A shift inward of the demand curve so that there is an decrease in the quantity demanded at every price

Question 13

Factor shifting demand curve (Income)

Answer 13

• How much money a consumer has affects their willingness and ability to purchase goods and service at different price levels
• luxury and normal goods vs inferior

Question 14

Factor shifting demand curve (The price of complementary goods)

Answer 14

• in joint demand
• price of one increases the demand for other good decreases

Question 15

Factor shifting demand curve (The price of substitute goods)

Answer 15

• in competitive demand
• price of one increases the demand for other good increases

Question 16

Factor shifting demand curve (tastes and fashions)

Answer 16

if people start to enjoy a good or service more or it becomes more fashionable then demand is likely to increase

Question 17

Factor shifting demand curve (Advertising and marketing)

Answer 17

The aim of most marketing is to increase demand for good or service i.e. persuading more people to purchase

Question 18

Factor shifting demand curve (size of population/target market)

Answer 18

i.e. growing number of pensioners leads to an increase in the demand for pensioner holidays