Demand Curves - MICRO.E L.3

What is Demand?

demand is the quantity of goods/services consumers are willing and able to buy at a given price in a given time period

Draw a Demand curve that is only affected by price

What are the other (non-price) factors that affect demand and explain how?

P - Population as a greater population will lead to more demand in a product

A – Advertising as good/bad adverts will increase/decrease the willingness to buy something or not

S – Substitute price, Coke vs Pepsi if one price rises the demand for the other will also rise

I – Income, Normal goods and inferior goods

F – Fashion, as trends will affect what people will buy or not buy

I – Interest rates, High/low rates will repel/attract people to /borrow to buy

C – Complements price, if the price of compliments rise/fall the demand for the good/service will fall/rise

Draw a demand diagram that is affected by non price factors

Define a Normal and Inferior good

Normal goods = As income rise/fall demand will also rise/fall

Inferior goods = as income rises/falls demand for these goods will fall/rise