Supply And Demand Shifts Flashcards
1
Q
Income
A
- Normal Goods: demand increases as income
* Inferior Goods: demand decreases as income increases
2
Q
Population
A
- Historical Trends
- Senior Citzens
3
Q
Consumer Expectations
A
- Higher price in future causes demand to increase
- If you know it is going on sale, demand decreases
4
Q
Consumer Tastes and Advertising
A
- Social Trends
- TV ads
- Internet
- Radio
5
Q
Price Elasticity
A
The measure of the impact of a price on a demand for a good
- Indicates the buyers need to buy the good or service
6
Q
Elastic Demand
A
When a change in price has a large impact on the demand for the good
• More Substitutes = More Elasticity
7
Q
Inelastic Demand
A
When the price of the good increases and the effect on demand is minimal
• That means that this good or service has little to no valuable substitutes
- Despite the increase in price people will still buy the same amount
8
Q
What causes shifts in demand?
A
- Income
- Population
- Consumer Expectations
- Consumer Tastes and Advertising
- Substitutions
- Complementary Goods
