Define the concept of demand and explain, on an intuitive level, why the demand curve for a good is downward sloping
What will be an ideal response?
Demand refers to relationship between the price of a good and the quantity consumers are willing and able to buy at each price. It is assumed that there is an inverse relationship between price and quantity demanded. The intuitive explanation is that as the price of a good falls, consumers' purchasing power increases. At the same time, the good becomes cheaper relative to its substitutes. For these reasons, consumers are willing to buy more of the good.
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Technically speaking, when the firm's output level is zero, its total revenue equals
a. zero b. its fixed cost c. its variable cost d. its marginal revenue e. its average revenue
Which of the following areas employed more workers in 2013?
a. educational and health services b. business and professional services c. retail trade d. manufacturing companies
Given the demand and supply conditions shown in Figure 4-2, if the government imposes a price ceiling of a, indicate the quantity consumers would like to buy and the amount producers would be willing to supply.
a. Consumers would want to buy t; producers would be willing to sell r. b. Consumers would want to buy r; producers would be willing to sell t. c. Consumers would want to buy t; producers would be willing to sell s. d. Consumers would want to buy s; producers would be willing to sell s.
Suppose that three consumers are in the market for good X. Consumer 1's (inverse) demand is PX = 40 ? QX; Consumer 2's (inverse) demand is PX = 50 ? 2QX; and Consumer 3's (inverse) demand is PX = 70 ? 4QX. When PX = $20, the market will demand:
A. 19.5 units. B. 47.5 units. C. 41 units. D. None of the statements is correct.