The desire to own something and the ability to pay for it.
law of demand
Consumers buy more of a good when its price decreases and less when its price increases.
When consumers react to an increase in a good's price by consuming less of that good and more of other goods.
The change in consumption resulting from a change in real income. (i.e. When consumers have more income, they tend to buy more goods.)
A table that lists the quantity of a good A PERSON will buy at each different price.
market demand schedule
A table that lists the quantity of a good ALL CONSUMERS in a market will buy at each different price.
A graphic representation of a demand schedule.
NOTE: A graphic representation of a market demand schedule is called a MARKET DEMAND CURVE.
Latin phrase that means "all other things held constant."
A good that consumers demand more of when their income increases.
A good that consumers demand less of when their income increases.
Two goods that are bought and used together.
Goods used in place of another.
elasticity of demand
A measure of how consumers react to a change in price.
Describes demand that is NOT VERY SENSITIVE (i.e. responsive) to a change in price.
NOTE: Describes demand whose elasticity is less than 1.
Describes demand that IS VERY SENSITIVE (i.e. responsive) to a chance in price.
NOTE: Describes demand whose elasticity is greater than 1.
Describes demand whose elasticity is exactly equal to 1.
The total amount of money a firm receives by selling goods and services.