1.2.2: Demand
Cards (9)
- Demand: Ability and willingness to buy a given good or service at a certain price
- Joint demand: Demand for one good is closely linked to demand for another
- Derived demand: Demand for one product drives the demand for another product
- Movements along the demand curve are caused by changes in price
- An extension is an increase in demand, and a contraction is a decrease in demand
- Utility: The total satisfaction a consumer gets from consuming units of a good
- Marginal utility: The change in utility per additional unit consumed
- Law of diminishing marginal utility: As a consumer consumes additional units of a good, extra satisfaction gained decreases, meaning at high quantities satisfaction is low. This explains why the demand curve slopes downwards
- Factors affecting demand (PIRATES)PopulationIncomeRelated goodsAdvertisingTastes and fashionsExpectationsSeasons