Demand, Supply and market equillibrium

Question 1

Define Demand

Answer 1

Demand is the amount of a good that consumers are willing and able to buy at a given price.​

Question 2

Drawing the demand curve​

Answer 2

label the y axis price and the x axis quantity​

draw the demand curve downward sloping from left to right and label it demand (or D)​

to find the quantity demanded at any given price:​

a) Select a price (P), 	shown on the y axis​

b) draw a dashed line 	towards the demand curve​

c) draw a dashed line 	down towards the x axis to 	show quantity (Q)​

Question 3

How to increase demand?

Answer 3

Reduction in price causes an increase in demand shown by a movement along the demand curve

Question 4

How does demand decrease?

Answer 4

Increase in price causes a decrease in demand shown by a movement along the demand curve

Question 5

How does demand movement occur

Answer 5

A change in price will always cause a movement along the demand curve​

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A change in any other factor of demand will cause a shift.​

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Left = decreases ​

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Right = increases ​

Question 6

What are the determinants of demand

Answer 6

Population
Advertising and branding
Substitute products
Income
Fashion and Trends
Interest rate
Complementary goods
External shocks

PASIFICE.

Question 7

Shifts in demand​

Answer 7

Shifts in demand are caused by anything other than a change in price

Question 8

substitute goods

Answer 8

The impact of a change in price will cause consumers to switch products to an alternative good. If air fair is too expansive a consumer could switch to a train or simply drive to their destination.​

Question 9

Complementary goods

Answer 9

Demand for one type of good will affect demand for another, purchase is somehow linked, petrol and cars, blu-ray player and blue-ray films

Question 10

Advertising and branding

Answer 10

As products are heavily advertised they may experience an increase in demand. If this did not occur then businesses would not invest in advertising at all. ​

Heavy branding on good will help to increase or keep demand stable​

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