2.3 Flashcards
define demand
the quantity of a good or service that consumers are willing and able to buy at given prices in a particular time period
define effective demand
consumers’ desire to buy a good, backed up by the ability to pay
define law of demand
as the price of a good or service falls, the quantity demanded increases, and vice versa
define demand schedule
a table that gives the quantities demanded at a range of prices
define ceteris paribus
all other things remaining the same
define demand curve
a graph plotting the quantities of a product demanded at a range of prices
define extension in demand
an increase in quantity demanded as a result of a fall in price
define contraction in demand
a decrease in quantity demanded as a result of a rise in pricce
state some of the non price factors of a demand curve shift
- real disposable incomes
- tastes and preferences ( trends and fashion)
- population
- price of substitute goods
- prices of complementary goods
define conditions of demand
factors other than the price of the good or service that lead to a change in position of the demand curve
define substitute good
a good that is consumed as an alternative to other good
define complementary good
a good that is consumed together with another good
define increase in demand
a rightward shift in the demand curve showing that a greater quantity demanded at each price than was previously
define decrease in demand
a leftward shift int he demand curve showing that a smaller quantity is demanded at each price than was previously
what are state some of the non price factors of a demand curve that increases in demand and explain
real disposable incomes: real disposable incomes of individuals after the effect of inflation and taxation have been taken into account. if incomes rise then consumers will have more money and may increase their demand for goods and services
population: the size, age and gender composition of the population will affect the market for many products. if more babies are born then there is likely to be an increase. the better or closer the substitute, the greater the effect on demand
what are state some of the non price factors of a demand curve that decreases in demand and explain
tastes and preferences: the popularity of goods and services if often influenced by the changes in society’s preferences and may be influenced by the media, advertising and technological change. if a good or service goes out of fashion then its demand will fall
prices of complementary goods: complementary goods are those in joint demand, which is to say that they are consumed together and therefore demanded together. if the price of the complementary good increases then the quantity demanded will increase
