Session 10 - demand Flashcards
What is the definition of demand
Quantity of a good that consumers are willing and able to purchase
What is the relationship between price and quantity demanded called
The demand curve
What is the acronym for the factors affecting demand
P - Price
T - Taste
I - Taste
S - Substitutes
C - Complementary
What are 7 factors that can lead to a change demand
Changes in price of substitute/complementaries
Changes in consumer income
Taste
Advertising
Demographics
External shocks
Seasonality
What is a substitute good
Goods bought as an alternative, with the same function
What is a complementary good
Goods purchased and consumed together
What is an example of a substitute good
Coke and Pepsi
What is an example of a complementary good
Shampoo and conditioner
How does demand effect complementary goods
Demand for one type of good will effect the demand of another
How does price effect substitute goods
Change in price will cause consumers to switch to an alternative
What are some examples external shocks
War, Interest rates, inflation rates, tax and exchange rates
What are demographics
Statistical data relating to population
What direction does the line of demand or supply shift if there is a decrease
Left
