Demand Flashcards
(16 cards)
law of demand
the quantity demanded varies inversely with its price
demand
the willingness and ability to purchase a good or service at the given price in a given time period.
market demand
the total demand for a good or service found by adding together all individual demand
shift of the demand curve
a complete movement of the existing demand curve either outwards (to the right) or inwards (to the left)
movement along the demand curve
when the price changes, leading to a movement up or down the existing demand curve
tax
a compulsory payment to the government
elastic demand
when the percentage change in quantity demanded is greater than the percentage change in price. Has a value between -1 and infinity
inelastic demand
when the percentage change in price is greater than the percentage change of quantity demanded . Has a value between 0 and -1
PED
the responsiveness of quantity demanded to a change in the price of the product
price elastic demand curve
not complete horizontal line. Not steep, from high to low.
price inelastic demand curve
not complete vertical line. Very steep from very high to very low.
perfectly price inelastic demand curve
vertical line
perfectly price elastic demand curve
horizontal line
unitary price elastic demand curve
an L shape without the sharp point in the middle, value of exactly -1 (1)
total revenue equation
price x quantity
price elasticity demanded equation
% change in quantity demanded / % change in price
