Demand

Question 1

Demand

Answer 1

When you demand something, it means you’re willing and able to buy it

Question 2

Demand curve

Answer 2

Shows the relationship between the price and quantity demanded of a good or service.

Question 3

Contraction in demand

Answer 3

When an increase in price leads to a decrease in quantity demanded

Question 4

Extension in demand

Answer 4

When a decrease in price leads to an increase in quantity demanded

Question 5

Changes in income (effects on demand)

Answer 5

For normal goods (e.g. Ben & Jerry’s ice cream) demand will increase when incomes rise, and demand will decrease when incomes fall.

For inferior goods (e.g. Sainsbury’s Basics ice cream) demand will increase when incomes fall, and demand will decrease when incomes rise.

Question 6

Price of other goods (effects on demand)

Answer 6

For substitute goods (e.g. iPhones and Samsungs) demand for the first good (iPhone) will decrease when price of second good (Samsung) falls, and demand for the first good (iPhone) will increase when price of second good (Samsung) rises.

For complementary goods (e.g. iPhones and iPhone apps) demand for the first good (iPhone) will increase when price of second good (iPhone apps) falls, and demand for the first good (iPhone) will decrease when price of second good (iPhone apps) rises.

Question 7

What does the conditions of demand mean?

Answer 7

factors which affect demand

Question 8

What are the conditions of demand?

Answer 8

1. Advertising
2. Fashion and trends
3. Population and age structure
4. Seasons
5. Income
6. Price of other goods