1.2.1 Demand

Question 1

demand definition

Answer 1

the quantity of a product bought at a given price over a given period of time

Question 2

demand curve definition

Answer 2

the line drawn on a graph that shows how much of a good will be bought at different prices

Question 3

the demand graph

Answer 3

• price is shown on the Y axis
• quantity demanded is shown on the X axis
• the line drawn is called the demand curve and each point on the demand curve represents the amount of goods or services a customer is willing to buy at a price

Question 4

factors leading to a change in demand

Answer 4

• changes in the prices of substitutes and complimentary goods
• changes in consumer income
• fashions, tastes and preferences
• advertising and branding
• demographics
• external shocks
• seasonality

Question 5

illustration of an increase and decrease in demand

Answer 5

price 
I     \      \       \ inc
I       \      \       \
I         \ \
I           \      \       \
I             \      \       \
I       dec \      \       \
I\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ quantity demanded

Question 6

substitute goods definition

Answer 6

goods that can be bought as an alternative to others, but perform the same function

Question 7

complimentary goods definition

Answer 7

goods that are purchased together because they are consumed together

Question 8

inferior goods definition

Answer 8

goods for which demand will fall if income rises or demand will rise in income falls
-e.g own brands (supermarket branded products), public transport, ready meals

Question 9

normal goods definition

Answer 9

goods for which demand will rise if income rises or demand will fall if income falls
-e.g. toilet roll, tooth paste, milk

Question 10

luxury goods definition

Answer 10

goods for which demand will rise rapidly if income rises or demand will fall rapidly if income falls
-e.g. clothes and shoes, going to the cinema

Question 11

what happens to the demand curve when their is a change in price

Answer 11

it causes a movement ALONG the demand curve