demand

• • Buyers demand goods from the market whilst sellers supply goods to the market 
• Demand curves show the quantity that is demanded at any given price 
• • Changes in price will lead to a change in quantity demanded 
• One condition of demand is income - Demand for a normal good rises when income rises 
• A fall in income will lead to a fall in demand for a normal good. This is shown by a shift to the left of the demand curve
• • Another important factor which influences the demand for a good is the price of other goods
• Not all changes in prices will affect the demand for a particular good
• • Factors that affect demand - price, income, price of other goods, changes in population, changes in fashion, changes in legislation and advertising 
• Possible reasons for an upward sloping demand curve - giffen goods, goods with snob appeal and quality goods
• Conditions of demand - factors other than price, which lead to changes in demand and are associated with shifts in the demand curve
• • Consumer surplus - the difference between how much buyers are prepared to pay for a good and what they actually pay 
• Contraction of demand - when quantity demanded for a good falls because its price rises; it is shown by a movement up the demand curve
• • Demand or effective demand - the quantity purchased of a good at any given price, given that other determinants of demand remain unchanged 
• • Demand curve - the line on a price/quantity diagram which shows the level of effective demand at any given price 
• Extension of demand - when quantity demanded for a good increases because its price falls; it is shown by a movement down the demand curve
• Individual demand curve - the demand curve for an individual consumer, firm or other economic unit. It shows graphically the relationship between price and quantity demanded for the individual
• Market demand curve - the sum of all individual demand curves