Demand

• Consumer goods And services help satisfy our needs and wants directly  Examples: Food, clothing, shelter, transportation
• Demand is quantity of a good or service that consumers are willing and able to buy at a given price in a given time period
• demand curve shows relationship between the price of an item and the quantity demanded over a period of time
• Diminishing marginal utility is when marginal utility starts to decrease instead of increase
• Effective demand is when consumers desire to buy a product is backed up by an ability to pay for it
• Excess demand is the difference between between quantity supplied and quantity demanded when price is set up below the equilibrium price
• Law of demand is that there is an inverse relationship between the price of a good and demand. as price falls there is an expansion of demand but if price rises there is a contraction of demand
• Perverse demand circle is one which slopes upwards from left to right so an increase in price leads to an increase in demand
• Willingness to pay is the maximum price a consumer is prepared pay to obtain a product