1.2.1 demand

Question 1

what is demand

Answer 1

the total amount of goods and services consumers are willing to buy at a given price

Question 2

what factors affect demand

Answer 2

-seasonality
-change in consumer tastes
-price
-consumer income
-external shocks
-change in the pricve of compliments and subsitutes
-demographics

Question 3

how does seasonality affect demand

Answer 3

in certain periods of the year certain products are needed more than others, a business selling coats will have less sales/demand in summer than in winter

Question 4

what is a substitute

Answer 4

a substitute is a similar rival product which can be bought instead, usually because its cheaper

Question 5

what is a complement

Answer 5

a complement is a good which accompanies another good, for example petrol is a complement to a car

Question 6

if the price of a complement goes up what will happen to the demand of a product

Answer 6

it will go down, people are less likely to buy the complement is the price goes up so then there is not much need for the product. for example is the price of strawberries goes up then the demand for cream will go down

Question 7

what is an inferior good

Answer 7

a good that experiences decreased demand as consumer income rises, and vise versa. for example aldi would receive increased demand if consumer incomes fell.

Question 8

how does consumer incomes affect demand

Answer 8

if consumer incomes go up then they will have more disposable income, which then leads to increased demand for many products. (and vise versa)

Question 9

what are some external shocks which will affect demand

Answer 9

-wars
-inflation
-recession
-rise in unemployment

Question 10

how will demographics affect demand

Answer 10

-an increase in migration will affect the demand for certain cultural products
-an increase in the lgbt community

Question 11

what is the movement of the demand curve upwards called

Answer 11

a contraction

Question 12

what is the movement of the demand curve downwards called

Answer 12

an extension

Question 13

what does an extension of the demand curve represent

Answer 13

it shows that more products are desired at lower prices

Question 14

what factor causes the demand curve to contract or extend

Answer 14

price

Question 15

what will cause a shift to the left or right on a demand curve

Answer 15

any factor which isnt price
-external shocks
-change in consumer tastes
etc

Question 16

what is the label for the x axis on a demand graph

Answer 16

quanitity

Question 17

what is the label for the y axis on a demand graph

Answer 17

price

Question 18

how does price affect demand

Answer 18

higher price will lead to lower demand
lower price will lead to a higher demand

Question 19

what is one problem with price affecting demand

Answer 19

price can also determine the quality of a product, so demand for a product may not go down if the quality is high even if price goes up

Question 20

what sort of relationship does a demand curve show between price and quanity

Answer 20

an inverse relationship