Demand

Question 1

Why is the demand curve downward sloping?

Answer 1

1. When prices go down, consumption increases as purchasing power increases
2. New consumers enter the market as it is the cheaper substitute so more affordable

Question 2

Extension

Answer 2

an increase in quantity demanded as a result of a decrease in price
- a movement down the demand curve

Question 3

Contraction

Answer 3

a decrease in quantity demanded as a result of an increase in price
- a movement up the demand curve

Question 4

A shift in the demand curve

Answer 4

How demand responds to a change in a non-price factor

Question 5

Joint Demand

Answer 5

When two goods are compliments and need to be brought together

Question 6

Competitive demand

Answer 6

When two goods are substitutes and both have the same function

Question 7

Composite demand

Answer 7

When goods have multiple uses and can be used for many purposes

Question 8

Effective demand

Answer 8

when consumers are willing and able to buy the good or service

Question 9

Shifts of the demand curve

Answer 9

1. income
2. price of substitutes
3. price of complements
4. consumer preference