GCSE-readyDemand
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Demand is about what buyers want and can pay for. Changes in price and other factors change how much is demanded.
What demand is
Demand is the quantity of a good or service that consumers are willing and able to buy at a given price over a period of time.
The demand curve slopes downwards: as price falls, quantity demanded rises.
The demand curve slopes downwards: as price falls, quantity demanded rises.
Movements and shifts
A change in the good's own price causes a movement along the curve: an extension (more demanded) or a contraction (less demanded).
A change in any other factor shifts the whole curve: right for an increase in demand, left for a decrease.
A change in any other factor shifts the whole curve: right for an increase in demand, left for a decrease.
Factors that shift demand
Advertising (successful ads shift it right).
Income (higher incomes usually shift it right).
Fashion and tastes.
Price of substitutes: if tea gets dearer, demand for coffee rises.
Price of complements: if printers get dearer, demand for ink falls.
Demographic changes: changes in the size or age structure of the population.
Income (higher incomes usually shift it right).
Fashion and tastes.
Price of substitutes: if tea gets dearer, demand for coffee rises.
Price of complements: if printers get dearer, demand for ink falls.
Demographic changes: changes in the size or age structure of the population.
The price of petrol rises sharply. What happens to demand for large cars?
- Petrol and cars are complements.
- Running a car becomes more expensive.
Answer: Demand for large cars decreases (shifts left).
Demand is willingness and ability to buy. Own price change: movement along the curve. Other factors (advertising, income, tastes, substitutes, complements, demographics) shift the curve.
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