Demand Flashcards
what is demand?
the number of goods/services customers are willing to buy at a given price
when does effective demand occur?
when customers are willing and able to buy at a given price
what is the relationship between quantity demanded by the customers and the price
inverse relationship
due to the relationship being inverse, what happens when the price increases?
the quantity demanded decreases
what happens if the price decreases?
the quantity demanded increases
what does the demand curve look like between quantity demanded and the price?
slopes down from left to right
what happens to the demand curve if there is an increases in price?
movement up the demand curve
what happens to the demand curve if there is a decrease in price?
movement down the demand curve
what does a change in price lead to?
a movement along the demand curve
what does a change in any other factors affecting demand lead to?
a shift in the demand curve (demand curve will move left or right)
what are some example of non-price factors affecting demand?
complements/substitutes, changes in taste, changes to income, advertising/branding, external shocks, seasonality
if there is a shift in the demand curve what happens to the price?
is remains the same
if there is a shift in the demand curve what happens to the units?
they will change (increase/decrease)
what are substitutes?
a replacement for goods e.g different brands of cars
what is a complementary goods?
goods that are consumed together e.g iPad and apple pencil
if consumer income rises what is likely to happen to the demand?
demand for normal goods increase
what happens if consumer income falls?
demand for inferior goods increase
what is an inferior good?
the quantity demanded decreases when income increases
how does demographics affect the demand of a product?
if the structure or size of a country’s population changes then the demand will also change
what is an external shock?
unexpected event
