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Define the term demand.
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Define the term demand.
Demand is the amount of a good or service that a consumer is willing to purchase at a given price in a given time period. This is sometimes called latent demand - especially if people want a product but are unable to pay for it.
What is a demand curve?
A demand curve is a graphical representation of the price and quantity demanded (QD) by consumers.
Define the term market demand.
Market demand is the combination of all the individual demands for a good or service.
What does a movement along a demand curve mean?
A movement along a demand curve represents a change in the quantity demanded (QD) when the price is the only factor that changes (ceteris paribus).
What is a contraction in QD?
A contraction in QD is the decrease in quantity demanded due to an increase in price, which is shown by a movement up the demand curve.
What is an extension in QD?
An extension in QD is the increase in quantity demanded due to a decrease in price, which is shown by a movement down the demand curve.
True or False?
The law of demand states that there is an inverse relationship between price and QD.
True.
The law of demand states that there is an inverse relationship between price and QD.
Define the term effective demand.
Effective demand is when a consumer is willing and able to purchase a good, i.e they have the money to purchase it.
What does ceteris paribus mean?
Ceteris paribus means that all other variables remain constant or unchanged.
Define the term individual demand.
Individual demand is the demand for a good or service from an individual consumer.
Define the term conditions of demand.
Conditions of demand are the numerous factors that will change the demand for a good/service, irrespective of the price level.
What does a shift in the demand curve represent?
A shift in the demand curve represents a change in demand due to changes in one of the conditions of demand.
Define the term substitute good.
Substitute goods are goods that can be used in place of each other, e.g. Sony and LG TVs.
What are complementary goods?
Complementary goods are goods that are used together, e.g. printers and printer ink.
Define the term real income.
Real income is the income of consumers adjusted for changes in the price level (inflation).
What is the relationship between income and demand?
There is a direct relationship between income and the demand for goods and services. As income increases, demand increases, and vice versa.
What is the result of a successful advertising campaign on demand?
A successful advertising campaign will raise awareness of the product and increase demand. The demand curve will shift right.
True or False?
Changes in population size/distribution can shift the demand curve.
True.
Changes in population size or distribution can shift the demand curve, as either can impact the demand for goods and services.
What is the difference between a movement along the demand curve and a shift in demand?
A movement along the demand curve represents a change in quantity demanded due to a price change.
A shift in demand represents a change in demand due to changes in one of the conditions of demand.
Define the term taste/fashion.
Taste/fashion refers to consumer preferences and trends that influence the demand for goods and services.