Demand Flashcards
1
Q
Define demand?
A
The quantity of a good or service that consumers are willing and able to pay at a given price in a given time period
2
Q
What are the three types of demand?
A
Effective demand
Latent demand
Derived demand
3
Q
What is effective demand?
A
A desire to buy the product is backed up by an ability and willingness to pay
4
Q
What is latent demand?
A
Often known as potential demand, there is a desire to buy the product but consumers lack the purchasing power
5
Q
What is derived demand?
A
The demand for a product might be linked to the demand for a related product
6
Q
As price decreases, what happens to the demand?
A
It increases
7
Q
What happens to the line representing demand if something is made free?
A
The line will fully extend to the x axis
