Demand

Demand: is how much of a product consumers are willing and able to buy

Effective demand: is the quantity consumers are willing to buy at the current market price

Individual demand: is the quantity of a good or service one consumer is willing and able to buy at

different prices over a period of time

Market demand: is the sum of all demands in the market

Expansion of demand: is the increase in quantity demanded due to a decrease in price

Contraction of demand: is a decrease in quantity demanded resulting from an increase in price

the factors that affect the demand curve can be remembered with the mnemonic PIRATES:

P-population: the larger the population, the higher the demand. changing the structure of the population also affects demand such as distribution of different age groups.

I-income: if consumers have more disposable income, they are able to afford more goods, so demand increases

R- related goods. Related goods are substitutes or complements. A substitute can replace another good, such as two different brands of TV. If the price of the substitute falls, the quantity demanded of the original good will fall because consumers will switch to the cheaper option. A complement goes with another good, such as strawberries and cream. If the price of strawberries increases, the demand for cream will fall because fewer people will be buying strawberries, and hence fewer people will be buying cream.

A-advertising: this will increase consumer loyalty to the good and increases demand

T- Tastes and fashions: the demand curve will also shift if the consumer tastes change

E- Expectations: This is of future price changes. If speculators expect the price of shares in a company to increase in the future, demand is likely to increase in the present.