The theory of demand Flashcards
1
Q
What is demand?
A
This is the quantity of a good or service that will be bought at a given price in a given period of time.
2
Q
Why does the demand curve, slope downwards?
A
This is because it is an inverse relationship between the price level and the quantity demanded. This assumes that ceteris paribus applies.
3
Q
Name 4 factors that affect demand.
A
- Price of substitutes
- Income
- Changes in population
- Changes in taste in fashion
- Successful advertising campaigns
- Changes in government legislation or laws
