1.2.2 Demand

• Demand:


  The quantity of a good or service that consumers are willing to buy at a given price in a given time period.
• Law of diminishing marginal utility:


  The additional satisfaction gained by a consumer declines as the number of goods consumed increases.

  (demand curve is downward sloping due to the law of diminishing marginal utility).
• Determinants of demand (shift demand curve):

  P-Population

  A-Advertising

  S-Substitutes (price of)

  I-Interest rates

  F-Fashion and trends

  I-Incomes of consumers

  C-Complements (price of)

  S-Seasonality