DEMAND

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  • DEMAND
    • a market exists wherever there are buyers and sellers of a particular good. demand is the quantity of goods or services that will be bought at a given price over a period of time.
    • DEMAND    CURVE.      the line on a price/quantity diagram that shows the level of effective demand at a given price.
    • Conditions of Demand. changes in price will lead to a change in quantity demanded. income or the price of other goods, which lead changes in demand and are associated with shifts in the demand curve.
      • EXTENSION OF DEMAND.when quantity of demanded for a good increases because its price falls; it is shown by a movement down the demand curve.
  • Demand and Income. demand for normal good rises when income rises.
    • changes in population- increase in population likely to increase demand for goods.
      • Advertising- very powerful influence on consumer demand that seeks to influence consumer choice.
      • LAW OF DIMINISHINGMARGINAL UTILITY.  value or utility to consuming the last product bought falls as more units consumed over a given period of time.
        • ADAM SMITH.consumers paid a high price for goods such as diamond and for necessities low price. it is known as paradox.
          • PARADOX. if there are fewer goods available to buy, such as diamonds, the consumers are prepared to pay a high price for them but if there are lots of goods then consumers will pay a low price.
      • CONSUMER SURPLUS.difference between how much buyers are prepared to pay for a good and what they actually pay.
    • DEMAND
      • a market exists wherever there are buyers and sellers of a particular good. demand is the quantity of goods or services that will be bought at a given price over a period of time.
      • DEMAND    CURVE.      the line on a price/quantity diagram that shows the level of effective demand at a given price.
      • Conditions of Demand. changes in price will lead to a change in quantity demanded. income or the price of other goods, which lead changes in demand and are associated with shifts in the demand curve.
        • EXTENSION OF DEMAND.when quantity of demanded for a good increases because its price falls; it is shown by a movement down the demand curve.

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