chapter 6- demand

what is demand

the quantity of a good/service that consumers are willing and able to buy at a given price over a given period

what is the law of demand

as price rises, demand falls, ceteris paribus

what does ceteris paribus mean

all the other factors remain the same

what does a demand curve show

the relationship between price and quantity demanded

what direction does a demand curve usually slope

downwards, from left to right

what happens to quantity demanded when price falls

quantity demanded rises

what causes a movement along the demand curve

a change in the products own price

what causes a shift of a demand curve

a change in a non-price determinant of demand

what does a rightward shift in demand show

an increase in demand

what does a leftward shift in demand show

a decrease in demand

what are some determinants of demand

HIS AGE (habits, income, substitutes, advertisement, government, expectations)

what is a substitute good

a good that can be used in place of another one

what is a complementary good

a good that is used together with another good

what is a normal good

a good whose demand increases when income increase

what is an inferior good

a good whose demand decreases when income increases