5 Demand Flashcards
Demand
A consumer’s willingness and desire to purchase goods and services at a specific price
Individual demand
one consumer’s willingness and ability to purchase goods and services at a given price
Market demand
the sum of all consumer’s willingness and ability to purchase goods and services at a given set of prices
Demand curve
Relationship between the price of product and the quantity demanded by the market
Joint demand
When products are demanded together - they are complements
competitive demand
When consumers demand one or the other product - the products are substitutes
composite demand
When a product is demanded for multiple possible uses
Movement along the demand curve
Change in the quantity demanded that results from a change o the price of a product
Contraction in demand
when there is an increase in price which decrease the quantity demanded
extension in demand
when there is an decrease in price which increase the quantity demanded
Increase in demand
A shift outward of the demand curve so that there is an increase in the quantity demanded at every price
decrease in demand
A shift inward of the demand curve so that there is an decrease in the quantity demanded at every price
Factor shifting demand curve (Income)
- How much money a consumer has affects their willingness and ability to purchase goods and service at different price levels
- luxury and normal goods vs inferior
Factor shifting demand curve (The price of complementary goods)
- in joint demand
- price of one increases the demand for other good decreases
Factor shifting demand curve (The price of substitute goods)
- in competitive demand
- price of one increases the demand for other good increases