Economics - Chapter 2
- Created by: sammilaw
- Created on: 02-11-14 14:54
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- CHAPTER 2: Demand
- Demand - the amount that consumers are willing and able to buy buy at each given price level
- Effective demand - demand supported by the ability to pay for the good/service
- Market - total demand in a market for a good, the sum of all individuals' demand, at each given price
- Contractions in demand - falls in demand due to an increase in prices
- Extensions in demand - rise in demand due to a fall in price
- Normal goods - goods/services which see an increase in demand when incomes rise
- Inferior goods - goods/services which see a decrease in demand when incomes rise
- Complementary products - goods that are consumed together
- Composite demand - a good that is demanded for more than one purpose, so an increase in demand for one purpose reduces the available supply for the other, typically leading to higher prices
- Derived demand - when the demand for one good comes from the demand of another
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