Supply And Demand Flashcards
(24 cards)
Define effective demand
Consumers must be both willing and able to purchase goods and services
What is a movement
Change in line due to response to change in price
What does an extension in the demand curve represent
Increase in quantity demanded as a result of price decrease
What is a movement in demand
Movement along the demand curve due to show how quantity responded to price
What is a contraction in demand?
Decrease in quantity demanded as a result of increase in price
What happens to the demand curve when there is an increase in price
Contraction
What happens to the demand curve when there is an decrease in price
Extension
What is a shift
Shows how demand responds to a change in non price factors
What does a shift to the left mean
Decrease in quantity
What does a shift to the right mean
Increase
What way does a graph shift when there is an increase
To the right
What way does the graph shift when there is a decrease
Left
What is derived demands
Depends upon the demand for something else
Give an example of a derived demand
Labour depends on demands for goods and services
What is the demand that depends upon the demand for something else
Derived demand
What is joint demand
Goods that are bought together
Give and example of a joint demand
PS4 and controller
What type of demand is demand of both goods with another
Joint demand
What is competitive demand
Compete with each other to provide the same function
Give an example of competitive demand
Coke and Pepsi
What are composite demands?
Goods that can fulfil multiple functions
Give an example of a composite demand
Water
How does consumer preference affect demand
Increase in popularity
More demand due to fashion or trend
At any given price more is demanded
How does price of substitutes affect demand
Direct alternative effect
Price increase for substitutes op
