demand

demand

focused on the consumers

to demand

• wtb

• can afford

• plan to buy

factors of demand

• labour

• land

• entrepreneurship

• capital

goods and services

finished place for goods and service

• can be tangible or intangible

quantity demanded

amount consumers plan to buy; affects price during a time period

law of demand

• substitution effect

• income effect

substitution effect

• when people seek substitutes for something, the qty demanded for it goes down

• price goes up, demand goes up

• price goes down, income goes up, demand goes up

income effect

• people cannot afford the things they previously bought, qty demand for it goes down

• price affects people’s ability to buy aka real income

• money income/price = real income

non-price determinants

• expectations

• tastes

• consumer income

• amount of consumers

• other related prices

price determinants

price of product itself

market demand aka demand

sum of all the individual demand for the product at different price

shift in demand curve causes

• market demand

• price of product

other related items prices

• substitute

• complementary

substitute

• satisfies similar needs

> ver a, diary ver, ver z

complementary

used in combination

> pc + pc holders

if there is no price change for pc holders, demand for it will go up

amount of consumers

• increase in consumers, demand curve shift to right

• decrease in consumers, demand curve shift left

consumer income

• normal (authentic)

• inferior (dupe)

normal goods (authentic)

• income goes up demand goes up

• income and demand directly related

inferior goods (dupes)

• income goes up demand goes down

• income goes down demand goes down

• income and demand -ve rs

expectations

• income goes up, buy more

• income goes down, buy less

> expect gym ys pc to be more common, buy less now

movement along demand curve

non-price determinants

shift in demand curve

price determinants