The Market 1.2 Flashcards
1
Q
What is demand?
A
Number of goods customers are willing to buy at a given price
2
Q
What is effective demand?
A
Customers are willing and able to buy at a given price
3
Q
What is the basic ‘law’ of demand?
A
Inverse relationship between the quantity demanded by customers and price
4
Q
List non-price factors that affect demand
A
- Change in price of substitute
- Change in price complement
- Change in consumer income
- Fashion, tastes, preferences
- Advertising + branding
- Demographics
- Seasonality
- External shock
