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Well to answer the question lets go back a few steps:
In Economics:
Law of Demand ( according to investopedia) - A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.
Here's a graph of what a typical demand curve looks like: click the NeTMBA link that follows this answer
So now that we know what the Law of Demand is now lets see what effects it. The Law of Demand is affected by:
* Customer Preference * Income * Number of Potential buyers * Expectations of Price Change
* Price of Related goods- Complements and Substitutes
Complements- a good often consumed together with another good in economics. So if the Price of complements goes up then the demand for the good goes down thus shifting the graph to the left.
Substitutes- A good where in can be used in place of another.
There are other factors that effect it but the list above are some of the most common ones. I hope this helps with understanding the law of demand. To find an example of this click on the NeTMBA link that follows to see it.
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Example of law of demand?
marketing is a great example of law of demand
What is cross price elasticity demand?
Cross price elasticity of demand measures the responsivenss of demand for a product to a change in the price of another good.
Change in market price?
Changes in the market price is determined by demand of a product. If consumers demand the product, then the price will increase.
What will happen to the equilibrium price level and the real GDP if the aggregate demand increases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
How the prices of shares get change?
As shares come into more demand the price of them goes up.
Distinguish between a change in demand and a change in quantity demanded?
This is based on the principle of an economics demand curve. A change in quantity continues to move along the same demand curve, whereas a change in demand shifts it either to the left or right of the original line. A change in the quantity or amount demanded is brought about by a change in the price of the item. For example, a price hike or sale. A change in demand on the other hand, is caused by other variables such as a change in tastes, income or competition from related goods.
What is the between derived demand and joint demand?
Derived demand occurs when there is a change of customers' demand on particular product and produces have to buy new production equipment, which means that the change in consumer demand for a product affects demand for all firms involved in the production of that product. Joint demand has nothing to do with changing the production equipments. In this case, demand of the product depends on demand of its compliment. For example, demand on inc depends on demand on printers.
What is the difference between change in demand curve and shift in demand curve?
Change in demand curve is caused by the change in the price of the product. This is the change that occurs ON THE DEMAND CURVE. The price changes changes the QUANTITY DEMANDED, not the demand curve itself. Shift in demand curve is caused by NON PRICE DEMAND DETERMINANTS. Basically it shifts the ENTIRE curve (right (increase) or left (decrease)). Change in income, change in number of consumers, taste and preferences, price of related goods, and future expectations all cause shifts in demand curve. For example, an increase in the number of consumers would shift the demand to the right because demand would increase.
The primary difference between a change in demand and a change in the quantity demanded is?
a change in demand is a movement along the demand curve, and a change in quantity demanded is a shift in the demand curve
What is example of full demand?
current demand of mobile phone set can be an example of Full demand.
Example of law of demand?
marketing is a great example of law of demand
What is the Four determinants of price elasticity of demand?
perfectly elastic demand the quantity change by infinitely large amount proportion due to the small change in price, is called perfectly elastic demand. perfectly inelastic demand the quantity demand doesn't change at all due to the change in price is called perfectly inelastic demand. relatively elastic demand the quantity demand changes by a little more percentage than the change in price is called relatively elastic demand. relatively inelastic demand the percentage change in quantity demand is less than the percentage change change in its price is called relatively inelastic demand unitary elastic demand the percentage change in quantity demand is equal to the percentage change in price is called unitary elastic demand
Total expenditures are determined by what?
Dividing the change in demand for the product by its change in price. e=(change in demand)%/(change in price)%
Distinguish between a movement along a given demand curve and a change in demandprovide an example for each?
The change in the demand of a commodity due to change in its price leads to moving the demand curve upward or downward depending upon the change in price. When the price rises, the demand falls. And when the price falls the demand for that commodity rises leading to movement in the demand curve. Shift in the demand curve is the result of the price remaining constant but the demand changing due to several other factors such as, change in fashion, population, etc. Hence at the same price when more is demanded the demand curve shifts to the right. and at the same price when less commodity is demanded it results in the shift of the demand curve to the left.
What is an example of a good for which the demand is likely to become more elastic over time if prices change dramatically?
gasoline
Is an example of a good for which the demand is likely to become more elastic over the time if the price change dramatically?
gasoline
A shift in the demand curve is called?
A change in quantity demanded
