Studied by 10 people
Complements
________: goods which have a joint demand as they enhance the satisfaction derived from another good.
Substitutes
________: alternative goods can satisfy the same want and need.
price availability
A change in the ________ of either will have an effect on the demand for complementary goods.
Status quo
________: overwhelming amount of choices.
Demand
________: the quantity of a product which consumers are willing and able to buy.
Complementary goods
________: demand decreases, quality demand decreases.
Substitute goods
________: demand increases, quality demanded decreases.
rationality
Bounded ________: theory that consumers have limited rational decision making driven by cognitive ability, time constraint, and imperfect information.
Effective demand
________: by purchasing power, the purchaser has the money to pay for the product.
Ineffective demand
do not have purchasing power
Law of demand
states that as the price of product falls, the quantity demanded will increase
PINTE
Prices 2. Income 3. Number of buyers 4. Taste/preference 5. Expectations
Methods of decreasing demand
Income drops
Substitution falls
Compliments rises
Buying discouraged
Methods of increasing demand
Income rises (normal goods)
Price of substitution rises
Price of complementary falls
Encouraged buying
Population likely to buy increases
Note 
Flashcard (20)