Zusammenfassung der Ressource
Introduction to Demand
- Demand is the number of units of goods a
consumer will buy at various prices
- The Law of Demand states that an increase in price
leads to a decrease in quantity demanded or a decrease
in price leads to an increase in quantity demanded
- Other Types of Demand
- Effective Demand
Anmerkungen:
- Consumers must be willing to buy and be capable of paying the price set by the supplier. It is demand backed by the necessary purchasing power.
- Derived Demand
Anmerkungen:
- Derived demand occurs when one commodity is an essential part of another commodity and it is demanded not for its own sake. e.g. steel and cars.
- Composite Demand
Anmerkungen:
- Composite demand occurs when a commodity is required for a number of different uses. e.g. sugar
- Joint Demand
Anmerkungen:
- Joint demand occurs when the demand for one commodity is joined with the demand for another. Also called complementary goods. e.g. petrol and cars.
- Movement or a Shift in a
Demand Curve
- A shift in the demand curve is caused
by a change in any non-price
determinant of demand
- A movement in the demand curve is
caused by a change in the price of the
good itself
- Factors Affecting the
Demand For a Good
- Its own price
- Price of other Goods
- Substitute goods
- Complementary Goods
- Level of Income
Anmerkungen:
- A rise in income causes more normal goods to be demanded, while a fall in income leads to more inferior goods to be demanded.
- Consumer Expectations
- Consumer Tastes
- Unplanned Factors
Anmerkungen:
- e.g. if there is a sudden heat wave, there would be an increase in the quantity demanded for sunscreen.
- Government Regulations
Anmerkungen:
- e.g. the plastic bad levy is aimed to reduce consumption of plastic bags.
The smoking ban is aimed at curtailing tobacco consumption
- Exceptions to the Law of Demand
- Giffen Goods
Anmerkungen:
- Giffen Goods are goods with a positive price effect, i.e. more is bought as the price rises and less is bought as price falls
- Bread, rice and potatoes
- Snob Items
Anmerkungen:
- Some commodities are attractive to some buyers because of their exclusiveness or high price. A rise in price makes them more exclusive.
- Yachts, sport cars and
designer clothes
- Speculative Goods
Anmerkungen:
- e.g. if a person is considering buying stocks and shares, the possibility that prices are likely to be even higher in the future will stimulate and probably increase quantity demanded at current prices
- Addictive Goods
Anmerkungen:
- Even when the price of the commodity increases, they will probably continue to purchase these goods and their demand for the commodity may actually increase because of their addiction.