2.2 DEMAND Flashcards
what is market demand
consists of the sum of all individual demand schedules in the market
demand definition
the amount of a good that consumers are willing and able to buy at a given price
whats the demand curve
- graph with a downwards sloping line/curve indicating an inverse relationship between price and quantity demanded
what movement will happen if price rises
contraction in demand
what will happen if price decreases
extension in demand
what causes the demand curve to shift
changes in any factors affecting demand OTHER than price
what is joint demand
where demand for one type of good will affect demand for another eg. fuel and cars
what is competitive demand
where the impact of a change in price will cause the consumers to switch products to an alternative good eg. train fair prices increase there will be more bus ticket sales
what is derived demand
where the demand for one good can only exist if another good is demanded
what is composite demand
it happens when goods or services have more than one use so that an increase in the demand for one product leads to a fall in supply other
5 external factors that effect demand
- changes in consumer incomes
- fashion taste and preferences
- advertising and branding
- demographics
- seasonality
- other external shocks eg. war
whats a normal good
as income rises so does demand
whats an inferior good
as income rises the demand for the good decreases
