demand

Question 1

what is demand?

Answer 1

the quantity of goods/services a consumer is willing to buy at any price

Question 2

what is the theory of utility?

Answer 2

that consumers aim to maximise their satisfaction when buying products

Question 3

how does this lead to conflicts between consumers and businesses?

Answer 3

businesses aim to maximise profits so give consumers as little as they can get away with, making it difficult to maximise utility

Question 4

what 3 factors cause consumers to make bad decisions that affect them being able to maximise utility?

Answer 4

• habit
• brand loyalty
• lack of info on alternative goods

Question 5

what does the demand curve show?

Answer 5

the inverse relationship between the price and quantity of demand

Question 6

what is the law of diminishing returns? also called diminishing marginal utility

Answer 6

the more the person has of a product, the less the person will want this product

Question 7

what 4 factors influence demand?

Answer 7

• price
• price of other goods
• income
• preference

Question 8

how do these factors cause changes in the demand curve?

Answer 8

• price (moves along)
• price of other goods, income and preference (shifts in or out)