demand Flashcards

1
Q

what is demand

A

the desire, ability, and willingness to buy a product

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2
Q

law of demand

A

as price falls qquantity demanded rises

as price rises quantity demanded falls

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3
Q

quantity demanded

A

the amount of items that will be bought at a particular price

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4
Q

demand schedule

A

a chart showing how much of an item will be bought at different prices
xy table of quantity demanded

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5
Q

changes in quantity demanded

A

can be caused only by a change in the price od the good
a movement along the demand curve

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6
Q

change in demand

A

means that more or less is demanded at EVERY price

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7
Q

determinants of demand

A

the factors that change the quantity demanded without a change in price

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8
Q

ceteris paribus

A

all other rhinfs held constant
when ceteris paribus assumption is dropped, movement no longer occurs along demand curve, the entire demand curve shifts
at same price more people are willing and able to purchase that good

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9
Q

5 determinants of demand

A

consumer preference
market size
income
substitutes / price of related goods
consumer security (expectations)

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10
Q

elasticity of demand

A

the response in quantity demanded because of a change in price
tells whether a price should be changed

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11
Q

elastic

A

when a given change in price causes a relatively larger change in quantity demanded

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12
Q

inelastic

A

when a given channge in price causes a relatively smaller change in quantity demanded

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13
Q

unit elastic

A

whn a given change in price causes a proportional change in quantity demanded

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14
Q

factors that affect elasticity

A

availability of substitutes
% of consumer’s income
necessity orluxury
duration of price change
brand loyalty
who pays

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15
Q

elasticity formula

A

p2-p1
———- x 100
p1

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16
Q

utility

A

the usefulness or satisfaction that people get from a good/service

17
Q

total utility

A

the total value generated by several units of a good

18
Q

marginal utility

A

the extra satisfaction or usefulness an individual gets from consuming one additional unit of a particular good

19
Q

law of diminishing marginal utility

A

the utility will decrease with each additional unit of a good

20
Q

complementary goods

A

goods that go hand in hand with others
when something complementary has a price change, it affects the demand of your good