Demand (1.2.2) Flashcards
What does Demand mean?
The amount of a good/service that a consumer is willing and able to purchase at a given price in a given time period
What does a Demand Curve look like?
Slide 12
What’s the general rule of a Demand Curve?(Price and Quantity Demanded)
The general rule is the higher the price the lower the Quantity Demanded. If a business increases/decreases their price we move along the Demand Curve.
What does this look like on a graph?
Slide 13
What are the Factors leading to a change in Demand?
(7 Factors)
-Changes in Price of Substitutes and complementary goods
-Changes in Consumer Incomes
-Fashion, Tastes and Preferences
-Advertising and Branding
-Demographics
-External Shocks
-Seasonality
What happens to Demand on a graph when its increased? (Shift)
It shifts to the right -Slide 14
What happens to Demand on a graph when its decreased? (Shift)
It shifts to the Left-slide 15
What’s a substitute good?
A good that is an alternative product. e.g. Pepsi and Cola
What’s a Complimentary good?
Goods that are bundled together. e.g. Air pods and a phone
What happens to demand if a substitute goods price is increased? (On a graph)
Demand will shift to the right because if a substitute products price increases more people will then go for the non-substitute good. e.g. if Pepsi price increases more people will them go for coca cola instead
Slide 16
What happens to demand if a Complimentary goods price is increased? (On a graph)
Demand will shift to the left because if a complimentary goods price goes up then people will be less inclined to buy the good and so then won’t buy the good that comes with it. e.g. if the price of apple phones go up and a person decides not to buy it then they aren’t going to buy the air pods that then only work if are with the phone.
Slide 17
