Demand

• Market


  Any situation that brings a buyer and the seller into contact to conduct business, not just a physical place
• Market


  A group of buyers and sellers of a particular good or service
• A market can be an actual physical location such as a supermarket, a vegetable market, a gas station or even shops in a mall
• With the development of e-commerce, a market does not have to be a physical location
• Market forces


  • Supply
  • Demand
• Quantity demanded


  The amount of a good that buyers are willing and able to purchase
• Law of demand


  states as price rises the quantity of demand will fall
• Ceteris paribus


  Latin phrase meaning "all other things remaining equal"
• Ceteris paribus is used to illustrate the effects of price on demand and supply, as the economy is dynamic and things change constantly
• Demand schedule

  A table that shows the relationship between the price of a good and the quantity demanded
• Demand and price have an inverse relationship - when price goes up, quantity demanded goes down, and vice versa
• Demand schedule

  A table that shows the relationship between price of a good and the quantity demanded
• As price goes up


  Quantity demanded goes down
• As price goes down


  Quantity demanded goes up
• Demand schedule shows different price levels and the amount demanded at each price level
• Demand curve


  A graphical representation that shows the relationship between price and quantity demanded
• Demand curve is normally curved but can also be a straight line
• As price decreases

  Quantity demanded increases
• As price increases


  Quantity demanded decreases
• Demand curve is negatively sloped due to the inverse relationship between price and quantity demanded
• Market demand

  The sum of all individual demand for a particular good or service
• Movement along the demand curve

  Caused only by a change in the price of the product
• As price increases

  Quantity demanded decreases (movement along the demand curve)
• As price decreases

  Quantity demanded increases (movement along the demand curve)
• Shift in the demand curve

  A change in quantity demanded at every price level, causing the entire curve to move
• Factors that can cause a shift in the demand curve

  • Consumer income
  • Prices of related goods
  • Consumer tastes
  • Expectations
  • Number of buyers
• Effect of income on demand

  Higher income leads to higher demand, lower income leads to lower demand
• Effect of related goods prices on demand

  Higher prices of substitutes lead to higher demand, higher prices of complements lead to lower demand
• Effect of tastes on demand

  Changes in consumer tastes and preferences can shift the demand curve
• s sky-high the demand for water sure as a lot of demand states would fall where is a demand from a jury in visit similar product would rise because they can do the same things and therefore it won't make sense to buy the expensive but when you can get the same effect we're using imagine so that's how the price of related Goods would affect your demand
• Taste

  What you can't see what you eat, your personal tastes, fashion choices
• Taste changes from chicken to pizza

  Demand for chicken goes down, demand for pizza goes up
• Demand for torn-up jeans goes down

  Demand for the latest style goes up
• Expectations

  Beliefs about the future, e.g. a hurricane coming
• Expectation of a hurricane coming

  Demand for certain items (e.g. canned food) goes up in the short term
• Expectation of warm weather

  Demand for jackets goes down
• Number of buyers

  The population or amount of buyers, if it increases demand increases, if it decreases demand decreases
• Income increases


  Demand shifts to the right
• Income decreases

  Demand shifts to the left
• Taste/fashion changes in favor of a good

  Demand for that good increases