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  • Demand
    • Effective demand- When a desire to buy a product is backed up by an ability to pay for it
    • Derived demand-  demand for a factor of production used to produce another good or service 
    • Law of demand-
      • If price falls than there will be an expansion of demand- opposite= contraction
      • Income effect- if price falls= more demand as can afford more
      • substitution effect- if price falls product is relatively cheaper than alternative time- some customers switch
    • Factors of Demand
      • Change in price of substitute good/services in competitive demand
      • Change in price of complement goods
      • change in real income
      • Effects of advertising/marketing
      • interest rates
      • Seasonal factos
      • Social factors


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