Demand Flashcards
What is demand?
The quantity of a good or service that a consumer is willing and able to purchase at a given price over a given period of time.
The law of demand?
It states that there is an inverse relationship between the price of a good and the quantity demanded of a good ceteris paribus.
What is the law of diminishing marginal utility?
It states that additional units of a good consumed will bring a smaller addition to total utility than units previously consumed. Therefore marginal utility falls as more units are consumed.
What does demand depend on?
Price of the good,subsitutes and complements,income, tastes and preferences. Expectations of future price changes
What is joint demand?
This is demand for complementary goods.
What is competitive demand?
This is demand for substitutes.
What is composite demand?
It is demand for a good or service that has multiple uses.
