Chapter two- Demand in the Market

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  • Created by: Martine
  • Created on: 28-10-14 12:02
Demand
The amount that consumers are willing and able to buy at each given price level
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Effective Demand
Demand supported by the ability to pay for a good or service
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Market Demand
Total demand in a market for a good, the sum of all individuals' demand, at each given price level
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Contractions in demand
Falls in the quantity demanded caused by rise in prices
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Extensions in demand
Increases in demand caused by a fall in price
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Normal goods
Goods or services that will see an increase in demand when incomes rise
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Inferior goods
Goods or services that will see demand fall when income rises
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Complementary products
Goods that are consumed together, for example bread and butter
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Substitute products
Goods that are competing against each other e.g. PlayStation and Xbox
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Composite Demand
A good that is demanded for more than one purpose so that an increase in demand for one purpose reduces the available supply for the other purpose, leading to higher prices e.g. milk is used for butter and cheese
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Derived Demand
When the demand for one good or service comes from another good or service. E.g. the demand for cars stimulates the demand for: steel, fabric, plastic etc, therefore they are derived demand.
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Other cards in this set

Card 2

Front

Demand supported by the ability to pay for a good or service

Back

Effective Demand

Card 3

Front

Total demand in a market for a good, the sum of all individuals' demand, at each given price level

Back

Preview of the back of card 3

Card 4

Front

Falls in the quantity demanded caused by rise in prices

Back

Preview of the back of card 4

Card 5

Front

Increases in demand caused by a fall in price

Back

Preview of the back of card 5
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