1.3 Price Determination Flashcards
What is a demand curve?
A curve showing the amount of a good consumers are willing and able to buy at each and every price level
What are products that act as an alternative for consumers
A substitute
What are things that are often bought together called
Complements
What does ceteris paribus mean?
all other factors remain the same
What are the determinants of demand
The price of the good, consumer income, prices of other goods and services, consumer tastes and fashion and other factors like advertising
What is a normal good?
one where if price rises, demand will fall
What is a Veblen good?
When price increases of a luxury goods, demand increases
What is an inferior good?
One where demand decreases as incomes increase
What is a Giffen good?
When cheap stable foods are consumed in greater quantity when their price rises
What causes a demand curve to shift to the right
An increase in demand
What causes a shift to the left of a demand curve
A decrease in demand
