11304039
Description
Mind Map by Katerina Scott, updated more than 1 year ago
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Created by Katerina Scott
about 7 years ago
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Demand
- Elasticity of Demand
- Inelastic demand:
when a change in
price causes little or
no change in
consumer willingness
to buy the product
- iPhones
- Electricty
- Necessities
- Milk for families with
young children
- iPhones
- Elastic demand: when
a change in price
greatly impacts
consumer willingness
to buy a product
- Certain luxuries
- Certain luxuries
- Inelastic demand:
when a change in
price causes little or
no change in
consumer willingness
to buy the product
- Complementary Goods
- Example: Burgers and Fries
- Cheddar rounds and Frenchie
Fries are not complementary
because you can't buy them at the
same time.
- Cheddar rounds and Frenchie
Fries are not complementary
because you can't buy them at the
same time.
- Hamburger prices
go down and
people then buy
more fries
- Example: Burgers and Fries
- Law of Demand
- low prices = high demand
- high prices = low demand
- Price is the money value
that is placed upon a
product
- low prices = high demand
- Demand is the
quantity of a good
that a consumer is
willing to buy at a
given price
- Substitute
- a product that can be used instead of
another product for the same purpose
- If the price of fish increases, then it is likely
that the demand for chicken will increase
- If the price of fish increases, then it is likely
that the demand for chicken will increase
- The more substitutes a
product has, the more
likely demand for it will
be elastic
- a product that can be used instead of
another product for the same purpose
- Marginal Utility
- the amount of
usefulness of
satisfaction acquired
by adding one more
unit of a product
- Diminishing marginal
utility: decreasing
satisfaction or
usefulness as
additional units of a
product are acquired
- buying lawnmowers
- buying lawnmowers
- the amount of
usefulness of
satisfaction acquired
by adding one more
unit of a product
- Demand Data
- Demand scedule = table
- Demand curve = graph
- In reality, the rate of change
of the demand curve
becomes slower and more
horizontal as quantity gets
ever larger; this is beacuse
of dimishing marginal utility
- Demand scedule = table
- Job layoffs lead to lower
demand for "wants" and
luxuries, whereas the
creation of jobs results
in a higher demand for
consumer goods
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