Demand

The quantity of a good or service consumers are both able and willing to buy at a given price in a particular period of time. The higher the price of a product the lower the demand and vice versa.

States that the quantity demanded of a product will fall if the price increases and vice versa.

• Income effect

• Substitution effect

• Law of diminishing marginal utility

As the price of a product falls, consumers real income increases. They are able to buy more product at a lower price

As the price of a good or service falls, more customers are able to buy the product, so choose this over rival or substitute products that they might have previously bought.

As individuals consume more of a particular good or service, the satisfaction gained from the additional unit of consumption declines, so customers will only purchase more at lower prices

Any place where transactions take place between a buyer and a seller

Refers to the sum of all individual demand for a product at each price level

• Income

• Tastes and preferences

• Future price expectations

• Price of related goods

• Number of consumers

Products that consumers buy more of when their real incomes rise

Products that the demand falls when consumers real income rise. For example, used cars

Products that are jointly demanded. For example, milk and cereal

Products that are competitive in demand because they can be used in place of one another.

An increase in price along the demand curve

A fall in price along the demand curve