Demand and the Demand curve Flashcards
1
Q
What is demand ?
A
The quantity of goods and services consumers are willing and able to buy at a given price level
2
Q
What is the law of demand ?
A
Inverse relationship between price and quantity demanded
3
Q
What are some factors which change demand ?
A
Income effect
Substitution effect
4
Q
What is the income effect ?
A
As Price increases , purchasing power falls therefore people are less able to buy stuff
5
Q
What is the substitution effect ?
A
As Price increases , other goods become price competitive so people change consumption to cheaper goods
6
Q
What are some factors which can shift the demand curve ?
A
Population
Advertising
Substitute price
Income
Fashion
Interest rates
7
Q
A
