LAW OF DEMAND

Question 1

Demand

Answer 1

• a reflection of the consumers willingness and ability to buy the product at a given price within a given time preriod
• the quantity that the buyers are willing to take from the market at a given price within a given period.Demand

Question 2

Law of Demand

Answer 2

states that all other things remain constant (ceteris paribus), the higher the price of the goods, the lesser the quantity for the goods and the lesser the price the higher the quantity for the goods.

Question 3

Law of Demand (quote)

Answer 3

“The higher the price, the lower the quantity demanded” and vice versa.

Question 4

Factors Affecting Demand

Answer 4

• income of buyers
• number of potential buyers
• preferences
• complementary products

Question 5

The demand curve is always ________ due to the law of _________________.

Answer 5

The demand curve is always downward sloping due to the law of diminishing marginal utility.

Question 6

The law of demand states that there is a….

Answer 6

negative, or inverse, relationship between price and the quantity of a good demanded and its price.

Question 7

OTHER FACTORS AFFECTING DEMAND
Non-Price Factors

Answer 7

• Income (Normal and Inferior good)
• Occasion
• Preference
• Population
• Expectation
• Price of related products: substitute and complement

Question 8

Demand Schedule

Answer 8

is a table that shows the quantity demanded of a good or service at different price levels

Question 9

Demand Curve

Answer 9

is a graphical illustration of the demand schedule, the price measured on the vertical axis (Y) and the quantity demanded measured on the horizontal axis (X).

Question 10

Demand Function

Answer 10

shows how the quantity demanded of a good depends on its determinants, the most important of which is the price of the good itself, thus, the equation
Qd= a-b(P)

Qd = Qded for X
P= price of x
a= quantity of x when the p is 0
b= slope