Supply And Demand Flashcards
(5 cards)
1
Q
What is individual demand?
A
The amount that a consumer is willing and able to purchase at a given price
- also known as effective demand
2
Q
What is market demand?
A
The total amount of effective demand from all the consumers in a market
-Market demand is a combination of individual demands.
3
Q
What are the factors affecting demand for a good?
A
- Price
- Income
- Preferences
- Other prices
- Future prices
Or demographic changes and advertising.
4
Q
True or False?
Individual demand and market demand are the same.
A
False
Reason: Individual demand refers to a single consumer’s demand, while market demand is the sum of all individual demands.
5
Q
What does effective demand refer to?
A
The demand that is backed by purchasing power
- Effective demand is not just a desire for a good, but also the ability to buy it.
