Determinants of Demand Flashcards
Demand
A consumers desire to purchase goods and services and willingness to pay a specific price for them
Quantity demanded
The number of a particular good/service that consumers are willing to buy at a particular price
Individual demand curve
Shows a single good/service
Market demand curve
Shows the sum of individual demand curves
Demand curve
A downwards sloping graph that shows the relationship between price and quantity demanded. Any given point shows quantity of goods that would be bought at a specific price
Law of demand
The higher the price, the lower the quantity demanded
Movement
Movement along the demand curve is caused by a change in price
Demand differences
If a demand increases, at a given price, the quantity demanded will rise. On the other hand , if the demand decreases, at a given price, the quantity demanded will decrease.
Increased disposable income
More likely to spend so an increased demand
More expensive substitute
Non substitute is cheaper so the substitute has a decreased demand
Complements
If at a lower price, there is an increased demand
Fashion
If not on trend, decreased demand
Seasonal
Wrong season means a decreased demand
Advertisement
More advertisement means a higher demand
