Demand
2.3
Objectives
► A01 understand what is meant by demand
► A02 be able draw and label movements along and shifts of the demand
curve
► A03 be able to interpret the causes of shifts in the demand curve
Key terms
► Effective demand – the ability to pay for what you want or need
Definition of demand
► Demand refers to the willingness and ability of consumers to purchase
a given quantity of a good or service at a given point in time or over a
period in time.
► Effective demand - a consumer want or a need supported by an
ability to pay
Movement along the demand curve –
changes in price
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Individual and market demand
Individual demand
curve
Shifts of demand curve
An increase in
demand
Shifts of the demand curve
Decrease in demand
Remember
► A movement along the demand curve is caused by a change in price
► A shift of of the demand curve is caused by anything that affects
demand except price: advertising, trend, new features,
competition, income, social media.
► An outward shift of the demand curve is called an increase in
demand
► An inward shift of the demand curve is called a decrease in demand
► An upward movement along the demand curve is called a contraction
of demand
► A downward movement along the demand curve is called an
expansion of demand
Review
Key terms
► Effective demand
Objectives
► A01 understand what is meant by demand
► A02 be able draw and label movements along and shifts of the demand
curve
► A03 be able to interpret the causes of shifts in the demand curve
