The Nature of Demand (Edexcel A-Level Economics A): Flashcards
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Demand definition (2 key requirements)
Demand definition (2 key requirements)
Quantity consumers are willing AND able to buy
Law of demand
Law of demand
Inverse relationship: price ↑ → quantity demanded ↓
Marginal utility
Marginal utility
Additional satisfaction from consuming one more unit
Diminishing marginal utility
Diminishing marginal utility
Less extra satisfaction from each successive unit consumed
Normal good
Normal good
Demand increases when consumer income rises
Inferior good
Inferior good
Demand decreases when consumer income rises
Substitute goods
Substitute goods
Products that can replace each other
Complementary goods
Complementary goods
Products consumed together
Effect of price change on demand curve
Effect of price change on demand curve
Movement along curve (extension or contraction)
Causes of demand curve shift
Causes of demand curve shift
Changes in non-price factors (income, preferences, etc.)