Th1.2: The Conditions of Demand

Question 1

What is a way to remember the conditions of demand?

Answer 1

PIRATES

Question 2

What does P stand for?

Answer 2

Population - population increases, demand increase

Question 3

What does I stand for?

Answer 3

Income - (for most goods) if income increases, demand increases

Question 4

What does R stand for?

Answer 4

Related goods - links to XED

Question 5

What does A stand for?

Answer 5

Advertising - successful advertising, increase demand

Question 6

What does T stand for?

Answer 6

Trend/fashion - increase in trend, increase in demand

Question 7

What does E stand for?

Answer 7

Expectations - predicted price rise in future, current demand increase

Question 8

What does S stand for?

Answer 8

Seasons - e.g increase in demand for suncream during summer

Question 9

What can also have an effect on demand for goods and how?

Answer 9

government legislation - e.g demand for car seats after government made it a law that young children have to be in them