The various quantities of a good or service a consumer is willing AND able to buy at various prices
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The Law of Demand
As the price of a good or service increases, the demand decreases, and vice versa.
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Ceteris Parabus
With other conditions remaining the same; other things being equal.
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Demand Curve
A curve displaying what quantity of consumers are willing and able to buy a good or service at various prices.
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Shift Along the Demand Curve
A shift in price of a good or service results in a corresponding shift in the quantity demanded of that good or service.
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Shift of the Demand Curve
A shift in a Non-Price Determinant of demand results in a shift in the quantity demanded of a good or service with the price staying the same. This results in a shift of the demand curve.
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Effective Demand
The 'real life' demand. The various quantities of a good or service a consumer is willing AND able to buy at various prices. Not demand from makey-uppy land.
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Total Revenue
The total amount of money earned from a good or service at a price of a good or service. (price x quantity demanded = total revenue)
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Description of Demand Curves
-At p1 the quantity demanded is at __, shown at q1. -A (in/decrease/change in price, non-price determinant) results in (change in quantity demanded). -Shift of/along the curve from A to B.
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Non-Price Determinants of Demand
Factors other than price that vary the quantity demanded of a good or service.
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Demographics (N-PD)
As the size of the population of consumers of a good or service increases, the quantity demanded increases
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Advertising (N-PD)
As the amount advertisement and exposure of a good or service increases, the quantity demanded increases
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Complements (N-PD)
As the price of complements of a good or service increases, the quantity demanded decreases. As the quantity demanded of a good or service increases the quantity demanded of a complement also increases.
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Tastes/Trends (N-PD)
As a good or service becomes more desirable in society, the quantity demanded increses
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Substitutes (N-PD)
As the quantity demanded of a good or service increases, the quantity demanded of substitutes of that good or service decreases.
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Income (N-PD)
As income and money available increases so does the quantity demanded of normal goods and services, however the quantity demanded of inferior goods and services decreases.
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