Demand

• What is the relationship between price and quantity demanded according to the law of demand?


  Price and quantity demanded have an inversely proportional relationship.
• What happens to the quantity of demand when the price of a product decreases?


  The quantity of demand increases when the price decreases.
• What is demand defined as?

  Demand is the willingness and ability of consumers to purchase a product at a given price point.
• What is a surplus in the context of supply and demand?


  A surplus occurs when there is a high demand for a product but it becomes difficult to supply it.
• What happens to prices when there is a shortage of a product?


  Prices will rise when there is a shortage.
• What are related goods in economics?

  Related goods are substitute products and complementary goods that satisfy the same need.
• Give an example of substitute products.


  PS4 and Xbox are examples of substitute products.
• What are complementary products?

  Complementary products are goods that go with one another, such as a printer and ink.
• How does income affect demand?


  When demand increases, prices tend to rise; when demand decreases, prices tend to fall.
• How can tastes influence demand?


  Demand can shift due to changes in tastes over time, such as social trends.
• What role does advertising play in demand?


  Advertising can affect demand through promotions like celebrity endorsements and special offers.
• What are demographics in the context of demand?


  Demographics refer to the makeup of people in a certain area, including age, race, gender, and employment status.
• How do seasonal factors affect demand?


  Seasonal factors affect demand as certain products are typically purchased at specific times of the year.
• What are external shocks in economics?


  External shocks are events that come from outside a domestic economic system, affecting demand and supply.
• What can positive external shocks lead to?


  Positive external shocks can lead to widespread adoption of technologies and economic growth.
• What are negative external shocks likely to create?

  Negative external shocks can create instability and lead to periods of weaker economic growth.
• What are the factors that determine demand?

  • Price
  • Substitute and complementary goods
  • Changes in income
  • Tastes and fashion (trends)
  • Advertising
  • Demographics
  • External shocks
  • Seasonality