1.2.2 - Demand

• Demand is the quantity of a good/service that consumers are able and willing to buy at a given price at a given moment of time
• Diminishing marginal utility is the extra benefit gained from consumption of a good generally declines as extra units are consumed; explains why the demand curve is downward sloping
• The factors that shift the demand curve can be remembered using PIRATES:

  • Population
  • Income
  • related goods
  • Advertising
  • Trends
  • Expectations
  • Seasons
• Joint demand: This is when goods are bought together, such as a camera and a memory card.
• Composite demand: This is when the good demanded has more than one use
• Derived demand: This is when the demand for one good is linked to the demand for a related good