Home / Questions / Demand" refers to the relationship between the price of a good and the quantity consumers
Demand" refers to the relationship between the price of a good and the quantity consumers are willing and able to buy at each price.
57) A "change in demand" is caused only by a change in the price of the good.
58) Assume goods X and Y are complements. A decrease in the price of X would cause the demand for Y to increase.
59) Assume goods X and Y are substitutes. An increase in the price of X would cause the demand for Y to increase.
60) Assume the demand function for good X can be written as
Qd = 80 - 3Px + 2Py + 10I
where Px = the price of X,
Py = the price of good Y, and
I = Consumer income.
This equation implies that X and Y are substitutes.
61) Assume the demand function for good X can be written as
Qd = 80 - 3Px - 2Py + 10I
where Px = the price of X,
Py = the price of good Y, and
I = Consumer income.
This equation implies that X and Y are complements.
62) Assume X is an inferior good. If the incomes of people who buy X increase, demand for X will increase as well, but by a smaller percentage than the increase in income.
63) The market demand for a good is determined by horizontally summing the demand curves of individual consumers.
64) A decrease in the incomes of people who buy canoes would cause the demand for canoes to decrease.
65) Prices of related goods are a determinant of demand but not supply.
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