Demand

Demand

1. Types of Demand

   • Individual Demand
     • Qty.s of a good one consumer will buy at each price
   • Market Demand
     • Qty.s of a good all consumers in market are willing to buy at each price
   • Demand Schedule
     • Table showing different qty.s demanded for a good at various market prices at any given time

2. Other Types of Demand

   • Joint Demand
     • Eg. Phone + Charger
   • Effective Demand
     • Must be willing and able to pay price set by supplier
   • Derived Demand
     • Not for it's own sake but for manufacturing another
       • Eg. Timber for Chairs
   • Composite Demand
     • Good has number of uses
       • Eg. Sugar

3. Law of Demand

   • Price Down = Demand Up

4. Exeptions to Law of Demand

   • Addictive Goods
   • Snob Goods
   • Giffen Goods
     • A rise in price causes more demanded as people will have less income to spend on other types of goods
   • Expectations
     • If buyers think price will be higher in the future, demand will be higher

5. Factors Affecting Demand for a Good

   • Expectations
   • Complementary Goods
     • Used Jointly
       • Eg. Bread and Butter
   • Substitute Goods
     • Alternatives
       • Coke or Pepsi
   • Level of Income
     • Normal Goods
     • Inferior Goods
   • Unplanned Factors
   • Consumer Tastes
   • Government Regulations

6. Demand Function:

   • Dx = f(Px, Pog, Y, E, T, U, G)

7. Curves: Downward Sloping, left to right

   • Movement Along Demand Curve
     • £/$/€
   • Shift in Demand Curve
     • Caused by factors other than price