Demand (Leaving Cert Economics)
• Demand is the quantity that consumers will purchase at varying
prices.
• The Law of Demand states that as price increases quantity
decreases. As price decreases, quantity increases.
• Exceptions to the law of the demand, snob goods, Giffen goods
and a good of expectation.
• Snob good are goods that have a status symbol attached to them
e.g. Rolex watches. When the price goes up the demand goes up.
• Giffen goods apply poorer in our society e.g bread. As the
price of bread increases these people spend a larger proportion
of their income on bread rather than substituting a cheaper
alternative.
• Goods of expectation are the beliefs we hold about the future e.g
the purchase of shares, art property now in the belief that the
price and value will rise in the future.
• Snob goods, Giffen goods and goods of expectation have a
perverse demand curve.
• The normal demand curve obeys the law of demand.
• As price increases demand decreases and price increases.
• Movement along the demand curve.
• A change in the price of a good or service itself results in a
change.
• The demand function
⁃ Px
⁃ Pc The price of complementary goods
⁃ F the pr
⁃ Dx The demand for good x
⁃ T trends or tastes
⁃ Y is for income
⁃ D original demand curve.
• D1 new demand curve where less is demanded. Curve shifts
inwards.
• D2 more is demanded as the curve shifts outwards.
• Demand is the quantity that consumers will purchase at varying
prices.
• The Law of Demand states that as price increases quantity
decreases. As price decreases, quantity increases.
• Exceptions to the law of the demand, snob goods, Giffen goods
and a good of expectation.
• Snob good are goods that have a status symbol attached to them
e.g. Rolex watches. When the price goes up the demand goes up.
• Giffen goods apply poorer in our society e.g bread. As the
price of bread increases these people spend a larger proportion
of their income on bread rather than substituting a cheaper
alternative.
• Goods of expectation are the beliefs we hold about the future e.g
the purchase of shares, art property now in the belief that the
price and value will rise in the future.
• Snob goods, Giffen goods and goods of expectation have a
perverse demand curve.
• The normal demand curve obeys the law of demand.
• As price increases demand decreases and price increases.
• Movement along the demand curve.
• A change in the price of a good or service itself results in a
change.
• The demand function
⁃ Px
⁃ Pc The price of complementary goods
⁃ F the pr
⁃ Dx The demand for good x
⁃ T trends or tastes
⁃ Y is for income
⁃ D original demand curve.
• D1 new demand curve where less is demanded. Curve shifts
inwards.
• D2 more is demanded as the curve shifts outwards.
