4.1.3.1 The determinants of the demand for goods and services Flashcards
What is demand?
The quantity of a good or service that consumers are willing and able to buy at any possible price at a given time
The Law of Demand
As the price of a good or service falls, demand SHOULD rise
What does the Demand Curve show
Shows the relationship between price and quantity demanded and the quantity demanded of a good or service, at any given price, over a period of time
What is a contraction of demand?
When quantity demanded for a good falls because its price rises
How do you show a contraction in demand ?
it is shown by a movement up the demand curve
What is an extension of demand?
When quantity demanded for a good increases because its price falls
How do you show an extension in demand ?
it is shown by a movement down the demand curve
What is the mnemonic for factors affecting demand ?
P A S I F I C
What factors affect demand using the mnemonic?
Population Advertising Substitutes Income (disposable) Fashion and taste Income tax Complements
