The Law of Demand Quiz

Demand refers to the willingness and affordability to buy a product. Factors affecting demand include price, consumer income, consumer preferences, price of related goods, and future expectations.

The law of demand states that as the price of a product increases, the quantity demanded decreases, assuming all other factors remain constant. Exceptions to the law of demand include Giffen goods, Veblen goods, and expectations of future price changes.

Elastic demand occurs when a slight change in price leads to a significant change in quantity demanded, while inelastic demand occurs when a change in price results in a relatively small change in quantity demanded.

<p>Individual demand refers to the demand for a product by an individual consumer, while market demand refers to the aggregate demand for a product from all consumers within a specific time period.</p> Signup and view all the answers

<p>Autonomous demand refers to the demand for a product that is unrelated to the demand for other products, while derived demand is the demand for a product that is derived from the demand for another related product.</p> Signup and view all the answers

<p>The demand curve represents the relationship between the price of a product and the quantity demanded. It shows that as the price of a product increases, the quantity demanded decreases, and vice versa, all other factors being constant.</p> Signup and view all the answers

<p>Factors affecting demand include consumer preferences, income, prices of related goods, future expectations, and population. These factors can influence the demand for a product by either increasing or decreasing the quantity demanded.</p> Signup and view all the answers

<p>Individual demand refers to the quantity of a product that an individual consumer is willing and able to purchase at a specific price, while market demand represents the total quantity demanded by all consumers in the market for that product at a specific price. For example, an individual may demand 2 units of a product, while the market demand for that product may be 100 units.</p> Signup and view all the answers

<p>Exceptions to the law of demand include Veblen goods, Giffen goods, and expectations of future price changes. Veblen goods are luxury goods that experience an increase in demand as their prices rise, Giffen goods are inferior goods that experience an increase in demand when their prices rise, and expectations of future price changes can lead to an increase in demand despite a rise in price.</p> Signup and view all the answers

<p>Elastic demand occurs when a small change in price leads to a proportionally larger change in quantity demanded, while inelastic demand occurs when a change in price leads to a relatively smaller change in quantity demanded. For example, luxury goods often have elastic demand, while essential goods like food and medicine have inelastic demand.</p> Signup and view all the answers