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  • Demand.
    • Definition: the quantity of a good or service that consumers are willing and able to buy at a given price, at a given time.
    • Demand Curve
      • Shows the relationship between price and quantity demanded.
      • Decrease in demand causes a shift either left or right.
    • Lower prices =
      • Consumers more able and willing to pay ... demand increases.
    • Determinants of Demand.
      • Tastes and Fashion.
        • If something is popular it shifts to the right etc.
      • Income
        • The amount that people can afford to purchase with their income affects demand.
        • Normal Goods
          • demand more of if income increase.
        • Inferior Goods.
          • demand less if real income increases.
    • Interrelated Markets.
      • Substitute Goods
        • Increase in the price of one good will increase the demand of the other.
      • Complementary Goods.
        • Joint demand - increase in demand for one will increase demand for another.
      • Derived Demand
        • Demand for product increases the demand for one of the factors production.


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