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22 Cards in this Set
- Front
- Back
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Demand |
The willingness and ability to purchase a good or service at any given price in a given time period |
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Law of demand |
For most products the quantity demanded varies inversely with its price |
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Individual demand |
the demand for a good or service by an individual consumer |
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Market demand |
The total demand for a good or service found by adding together all individual demands |
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Movement along the demand curve |
When the price changes leading to a movement up or down the existing demand curve |
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Shift of the demand curve |
A complete movement of the existing demand curve outward or inward |
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Subsidy |
An amount of money the government gives directly to firms to encourage production and consumption e.g electric cars |
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Tax |
A compulsory payment to the government |
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Factors that affect a shift in demand |
Income Population Substitutes Complementary goods Economic situation Government Price expectation |
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Factors that affect a movement in demand |
Price Demand |
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Income |
If income rises - consumers will be able to buy goods & services whatever the price Unevenly distributed - demand for luxury goods and services go up > rich become richer If poverty increases - the demand for essentials and basic needs are going to rise |
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Marketing |
Designed to increase e the demand of a product Most popular form is advertising Large firms spend millions of pounds on it e.g McDonald’s |
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Tastes and fashion |
People prefer to buy different and more advanced products - demand increases E.g 3G are less popular the 4G phones one will increase the other will decrease Fashion makes people follow trends, get rid of old clothes buy new ones |
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Substitutes |
Substitute - where goods and services can be used in place of another good or service e.g sugar and honey |
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Complements |
Goods and services that go together e.g phones and chargers. The demand for the phone goes up, so will the demand for the charger |
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Population - size |
If population increases or (decreases) it will cause an increase or (decrease) in demand for most goods and services Could strain health services |
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Population - Age |
If there are more older people there will be an increase in demand for the type of good they want or need Might prefer a car to a motorbike |
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Population - Gender |
If more women are in the country or working (purchasing power) demand for goods for women will go up |
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Government policies |
Can change the demand in a product by imposing taxes or give subsides Take taxes from big firms and goes to government - less profit e.g hence why alcohol is expensive Subsides put money into firms |
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Economic situation |
2008 global financial crisis - people are unemployed or worried about being unemployed Fall in demand for certain goods Increase in demand for charity shops |
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Price expectations |
If people know the price of a product will go up people will buy the the item before it’s too late e.g housing Many by the goods now to save money in the future |
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PED |
The responsiveness of quantity demanded to a change in price of the product |
