Demand 1.2.1 Flashcards
1
Q
What is Demand?
A
Demand for a good/service is the quantity that customers are willing and able to buy at a given price in a given period of time
2
Q
What is the law of demand?
A
C’eteris paribus: there is an inverse relationship between the quantity demanded and the price of a good
- If the price of a good/service rises, there will be a decrease in demand (contraction)
- As the price of a good/service falls, there is an increase in demand (extension)
3
Q
What are the factors that can lead to a change in demand?
A
- Price of a product/service
- Advertising and branding
- Price of substitute goods
- Price of complimentary goods
- Income levels of consumers
- Trends and preferences
- Seasonality
- Demographics
- External shocks
4
Q
What does price do on the demand curve?
A
Price causes a movement
5
Q
What do the rest of the factors do on a demand curve?
A
The rest cause a shift
6
Q
Describe a shift on a demand curve
A
An increase in demand is shown by shift to the right
A decrease in demand is shown by shift to the left
