Demand Flashcards
Term 2, Year 10
What is competition in economics?
Occurs when there are many buyers and sellers acting independently, meaning no one has the ability to influence the price a product is sold for.
Define ‘demand’
Concerned with the behaviour of buyers. The demand of an individual consumer indicates the various quantities of a good or service the consumer is willing and able to buy at different prices during a particular time period, ceteris paribus.
Outline the law of demand.
When the price goes up, the quantity demanded goes down. When the price goes down, the quantity demanded goes up.
What is market demand?
Sum of all individual demands for a good.
What is a non-price determinant?
Variables other than price which influence demand. Change in price causes a shift along the demand curve.
What does a rightward shift indicate?
More is demanded for the given price. Increase in demand.
What does a leftward shift indicate?
Less is demanded for the price. Decrease in demand.
Define ‘normal’ and ‘inferior’ goods.
Normal: when demand increases in response to an increase in consumer income.
Inferior: when the demand decreases in response to an increase in consumer income.
Define ‘substitute’ and ‘complementary’ goods.
Substitute: two goods are substitutes if they satisfy a similar need.
Complement: two goods are complements if they tend to be used together.
