Demand(Chapter 7)

Question 1

what is demand

Answer 1

Demand is the want or willingness of consumers who must have enough money to buy the goods and services they need and want.

Question 2

Individual and market demand

Answer 2

Individual demand is the demand of just one consumer

Market demand for a product is the total demand for that product from all its consumers willing and able to buy it.

Question 3

Movements along a demand curve

Answer 3

• An extension in demand: as the product of a product falls, quality demand rises or extends.
• A contraction in demand: as the price of a product rises, quantity demanded falls or contracts.

Question 4

what does the market demand curve show

Answer 4

The relationship between the total quantity demanded by consumers each period and the price of that product.

Question 5

Conditions of demand

Answer 5

Increase in market demand:
- An increase in consumers income
- A reduction of taxes
- Rise in the price of substitutes
- Fall in the price of complements
- Consumer taste/fashion changing in favor of the product
- Increased advertising
- Rise in population
- Weather/other factors

fall in market demand:
- a fall in consumers income
- A increase of taxes
- Fall in the price of substitutes
- Rise in the price of complements
- Consumer taste/fashion changing in favor of other products
- Decreased advertising
- Fall in population
- Other factors, eg. a ban on public smoking reducing demand for cigarettes.