1.2 Demand Flashcards
What is Demand ?
The willingness and ability of a consumer to buy goods and services at a specific price.
What is individual demand ?
Demand of one person
What is market demand ?
The demand that comes from everyone in a particular market
What is utility ?
Benefit
What is the law of demand ?
Inverse(negative) relationship between quantity demanded and price
What is ceteribus paribus ?
All things are equal
What is the Income Effect ?
The change in demand for a good or service that results from a change in a consumer’s income or purchasing power
What is the substitution Effect ?
When consumers buy cheaper alternatives to a product or service when its price increases
What is the Law Of Diminishing Marginal Utility ?
Utility gained from consuming a product or service decreases as the quantity consumed increases.
What factors affect demand ?(PASIFIC)
-Population
-Advertising
-Substitutes
-Income
-Fashionable
-Interest Rate
-Complements
What is Joint Demand ?
When an increase in demand for Good X , causes consumer to demand more of Good Y.
What is Composite Demand ?
Where goods or services have more than one use, so that an increase in demand in one use leads to a fall in supply in another use
What is Derived Demand ?
When goods are only demanded because they’re needed for the production of other goods.
What is Competitive Demand ?
When an increase in demand for one good reduces the demand for another good.
