Topic 6: Demand Flashcards
1
Q
what is demand
A
the desire to consume goods/ services
2
Q
what is the law of demand
A
a rise in the price of a commodity will cause a consumer to purchase less of that commodity
3
Q
what is elasticity of demand
A
how responsive people are to changes in price
4
Q
what does the elasticity of demand determine
A
the slope of the demand curve
5
Q
How do u calculate elasticity of demand
A
% change in quantity/ % change in price
6
Q
what is consumer surplus
A
the difference between the maximum price a consumer is willing to pay for a good and the price they actually have to pay
