Demand

Question 1

What is the law of demand?

Answer 1

The quantity demanded increases when price decreases and that quantity demanded decreases when price increases. This is an inverse relationship

Question 2

Give the factors that allow for the shift in the demand curve.

Answer 2

RIPEN 
Related products 
Income 
Preferences and Tastes
Expectations of future prices 
Number of consumers

Question 3

How do related products affect demand?

Answer 3

• price of substitute goods- substitute goods are two goods that fulfill a similar want or need
• price of complementary goods- goods that are usually consumed together (printer+ink)

Question 4

How does income affect demand?

Answer 4

If consumer income increases, they have more money in their pockets to spend on goods and services

Question 5

How do expectations of future prices affect demand?

Answer 5

If a consumer believes that there will be soon be a fall in prices, demand will decrease as consumers wait for that sale

Question 6

How do number of consumers affect demand?

Answer 6

If there are more consumers, demand will rise as there are simply more potential demanders.

Question 7

Define Market

Answer 7

A mechanism that permits the interaction of buyers and selles of a good or service

Question 8

Define demand

Answer 8

The relationship between various possible prices of a good and the corresponding quantities that consumers are willing and able to buy per period of time, ceteris paribus