demand

• What is demand in economics?

  Demand is the ability and willingness to buy a particular good at a given price and at a given moment in time.
• What factors influence the demand for a product?

  • Price of the product
  • Price of other goods
  • Population
  • Income
  • Fashion / taste
  • Advertising
  • Weather
  • Legislation and expectations
• What happens to demand when there is a contraction in demand?

  Demand falls when there is an increase in price. (only price of the product changes)
• What is an extension in demand?

  An extension in demand occurs when the amount demanded of a good increases due to a decrease in price. (only the price of the good changes)
• How does the demand curve behave in relation to price changes?

  The demand curve is downward sloping; more will be demanded as price falls.
• What effect does an increase in income have on demand?

  An increase in income shifts the demand curve to the right, indicating an increase in demand.
• How does the price of other goods affect demand?

  If the prices of substitutes increase, the demand for a cheaper product will increase.
• What are substitutes in economics?

  Substitutes are goods that might be bought or used instead of another.
• What are complementary goods?

  Complementary goods are goods which are generally bought to be consumed alongside or with another good.
• What happens to the demand for complementary goods when the price of one good increases?

  An increase in the price of one good will lead to a decrease in demand for its complementary goods.
• How does population affect demand?

  An increase in population generally leads to an increase in demand, while a decrease in population leads to a decrease in demand.
• What is the expected effect on demand if there is significant growth in the population?

  We would expect to see an increase in demand for products.
• How do changes in demographics affect demand?

  Changes in the makeup of the population, such as age or gender, can lead to shifts in demand.
• What is the impact of fashion and taste on demand?

  Fashion and tastes change over time, affecting demand; popular products may see increased demand, while others may see decreased demand.
• How does successful advertising influence demand?

  Successful advertising increases demand for a product, shifting demand to the right.
• How can weather and seasons affect demand?

  Weather and seasons can significantly impact demand; for example, rain increases demand for umbrellas.
• What role does legislation play in demand?

  Legislation can increase demand by making certain products compulsory or decrease demand by making consumption more difficult.
• Give an example of how legislation can affect demand.

  Government laws requiring baby car seats increase demand for those products.
• What happens to demand for smoking products if legislation makes consumption more difficult?

  Demand for smoking products would likely decrease.
• price of product

  
• income graph

  
• price of other goods

  
• population graph

  
• advertising of a product can cause a decrease in demand for its substitutes
• what would cause the demand curve to shift to the left? (d to d2)

  • successful advertising campaign for a substitute product
  • significant fall in incomes in the country
  • a decrease in price of substitute
  • laws restricting the amount purchased (e.g families restricted to one car, meaning a clio would be too small, so demand decreases)
  • influencers or celebrities endorsing the substitute
  • a report that the product causes health concerns (e.g denim, would cause disutility and reduce demand)

  
• what would cause the demand curve to shift to the right? (from d to d1)

  • the product gains good publicity (eg winning car of the year)
  • a successful advertising campaign of the product
  • a press report that there will be shortages of the product or its compliments

  
• the demand of a product also depends on whether it as a normal or inferior good, an individuals expectation or opinions, the price change etc
• demand curve

  
• What is the definition of demand?

  The ability and willingness to buy a particular good at a given price and at a given moment in time.
• expectations affect demand

  • if people expect a shortage, they will stock up today to guarantee their supply- causing an increase in demand (shifting demand curve from d to d1)