Demand

• Demand

  The number of goods/services customers are willing to buy at a given price
• Effective demand

  Occurs when customers are willing and able (they have the money) to buy at a given price
• Price and quantity demanded

  There is an inverse relationship - as price increases, quantity demanded decreases, and as price decreases, quantity demanded increases
• The demand curve slopes downwards due to the inverse relationship between price and quantity demanded
• Demand refers to the number of goods/services customers are willing to buy at a given price
• The quantity demanded by customers

  Decreases as the price increases
• The quantity demanded by customers

  Increases as the price decreases
• The demand curve slopes downwards from left to right
• Diagram showing change in price and quantity demanded

  • Price increases from £10 to £15, quantity demanded falls from 10 to 7 units
  • Price decreases from £10 to £5, quantity demanded increases from 10 to 15 units
• Movement along the demand curve

  Refers to a change in quantity demanded due to a change in price
• A change in any non-price factor will lead to a shift in the demand curve
• Diagram showing shift in demand curve

  • Demand curve shifts left due to decrease in demand
  • Demand curve shifts right due to increase in demand
• Non-price factors affecting demand

  • Change in price of substitutes
  • Change in price of complements
  • Change in consumer incomes
  • Changes in fashions, tastes & preferences
  • Changes in advertising & branding
  • Changes in demographics
  • Seasonality
  • External shocks
• A change in a non-price factor that leads to less demand will shift the demand curve to the left, while a change that leads to more demand will shift the demand curve to the right