Demand Flashcards
Law of Demand
As price falls, quantity demand rises
As price rises, quantity demand falls
Price and quantity demanded have an inverse relationship
When consumers buy goods, they are trying to maximize ____ by getting the best quality product at the lowest price
Utility
6 factors that can shift the Demand for homes (determinants of demand)
- Change in consumer reference
- Change in price of a substitute
- Change in price of a compliment
- Change in national incomes
- Change in consumer population
- Change in consumer expectations
A shift right
Increase
A shift left
Decrease
A shift along the demand curve means the ___ changed and caused a change in ____ _____
Price
Quantity demanded
Examples of elastic
Sport cars, light decoration, nike shoes
Examples of inelastic
Allergy medicine and inhaler
3 characteristics of inelastic demand
- Necessity
- No good substitute
- Cannot delay purchase
A elastic demand curve is more (horizontal/vertical)
Horizontal
An inelastic demand curve is more (horizontal/vertical)
Vertical
If the price of a good rises, demand for its complementary good will
Fall
If the price of a good falls, demand for its complementary good will
Rises
When incomes rise, demand for Normal goods
Rises
When incomes rise, demand for inferior goods
Falls
