Demand and Consumer Choice

A series of flashcards covering key vocabulary and concepts related to demand and consumer choice in economics.

Demand

Represents the quantity that buyers are willing and able to purchase at every possible price.

Law of Demand

The quantity demanded falls as price increases, all else equal (ceteris paribus).

Individual Demand

The demand from a single consumer for a good or service.

Market Demand

The sum of all individual demands for a particular good or service; graphically represented as a horizontal sum.

Market Equilibrium

The price and quantity at which the quantity supplied equals the quantity demanded.

Movements along the Demand Curve

Changes in quantity demanded due to price changes.

Shifts in Demand Curve

Changes in demand due to factors other than price, resulting in an increase or decrease of demand.

Normal Goods

Goods for which demand increases as consumer income increases.

Inferior Goods

Goods for which demand decreases as consumer income increases.

Complements

Goods that are often consumed together; an increase in the price of one decreases the demand for the other.

Substitutes

Goods that can replace each other; an increase in the price of one increases demand for the other.

Factors that Determine Demand

Factors affecting the position and shape of the demand curve, including price, consumer preferences, income, and related goods.