2.2 Demand Flashcards
Define individual demand
The demand for a good or service by an individual consumer
What causes a movement along the demand curve?
Change in price
What is the consequences of a contraction in demand (for consumers)?
- Buy fewer goods
- Buy cheaper substitutes
Define market demand
The total demand for a good or service found by adding together all individuals demand
What is the consequences of an expansion in demand (for consumers)?
- Buy more goods
What is a movement down the demand curve called?
Expansion in demand
Define demand curve
A graph showing how the demand for a product varies with changes in its price
What is the consequences of a contraction in demand (for producers)?
- Decreased sales/profits
- May need less workers
What are the consequences of a right shift in demand?
Price/quantity increases
What is a movement up the demand curve called?
Contraction in demand
What causes a shift of the demand curve?
Non-price factors (e.g. increase in income or marketing, preference for a substitute)
Define demand
The willingness and ability to purchase a good or service at the given price in a given time period
What are the consequences of a left shift in demand?
Price/quantity decreases
What is the consequences of an expansion in demand (for producers)?
- Increased profits
- Employ more workers
Define price elasticity of demand
The responsiveness of quantity demanded to a change in price of a product
