demand and supply D

Question 1

demand

Answer 1

is the quantity of a good or service that customers are willing and able to buy at given prices in a particular period of time.

Question 2

2 requirements to speak of demand

Answer 2

1.desire or willingness 2.capability or ability

Question 3

due to inverse(negative) relationship between price and demand we have

Answer 3

1.income effect 2.substitution effect 3.law of diminishing marginal utility

Question 4

income effect

Answer 4

as the price of a product falls, real income increases.

Question 5

substitution effect

Answer 5

as the price of a product falls, consumers replace higher priced goods with lower priced goods.

Question 6

law of diminishing marginal utility

Answer 6

no satisfaction is gained over the long run as consumers consume more.