Demand And Suply Flashcards
(32 cards)
What is a market?
A market is a place where buyers and sellers connect with each other to trade or exchange goods and services.
What is a final market?
Final markets, are places where finished goods and services are bought and sold, e.g supermarkets
What is a factor market?
Factor markets is where the factors of production are bought and sold. E.g. property market
What are commodities markets?
Where raw materials used in production of goods and services are bought and sold. E.g. agricultural products
What does demand mean?
Demand refers to the quantity of a product that buyers are willing to purchase at a given price
What does effective demand mean?
Effective demand is a willingness to buy, backed up by an ability to pay.
What happens when the price is reduced?
The demand goes up.
What happens when the price is increased?
The demand will fall.
What are some real world examples of demand and price.
- Lowe car prices will increase the demand for cars. 2. In housing market, increased demand for family homes in some areas has caused house prices to rise.
What is a demand schedule.
A demand schedule shows the number of goods demanded by customers at different price levels.
Does price go on the x or y side?
Prices goes on y. (Pricey)
What is a substitute good?
A substitute good is when a consumer decides that because the price has risen on a product, they decide that they can’t afford it or it is not worth that price so they switch to buying an alternative product/substitute good.
What is a demand curve?
A demand curve is a graph that illustrates tha expected demand for a product at various price levels.
What way does the demand curve move if there is a decrease in demand?
Left
What way does the demand curve move if there is an increase in demand?
Right
Explain price of substitute products?
If the price of substitute produce is reduced, consumers will demand more of them, which may reduce demand for other products e.g. Coca Cola and Pepsi
Explain price of complementary goods?
A complementary good is a product that is used with another product. And in some cases consumers need to buy both products. E.g printer and ink cartridges.
Explain price of fads and fashions?
As consumer tastes change, demand for products will also change. Fashionable goods or brands will see a sharp increase in demand.
Explain price advertising?
Products that are heavily advertised may see an increase in demand.
What is a normal good?
A normal good is one that will be in greater demand when the buyer’s income rises. (Most goods are normal goods)
What is an inferior good?
An inferior good is one for which there will be less demand when the buyer’s income rises. For example, consumers with extra income may buy premium brands rather than own-brand products.
What does supply mean?
Supply refers to the quantity of a product that producers are willing to sell at a given price.
What happens to the supply if the price goes down?
The supply goes down.
What happens to the supply if the price goes up?
The supply goes up.
