Demand
Introduced| English | Meaning |
|---|---|
| income/ˈɪŋkʌm/ | Money received by a person or organisation over a period. |
| law of demand/lɔː ɒv dɪˈmænd/ | The tendency for quantity demanded to fall as price rises, with other relevant factors held constant. |
| demand/dɪˈmænd/ | The quantity of a good or service that buyers are willing and able to purchase at different prices over a period. |
| quantity demanded/ˈkwɒntɪti dɪˈmændɪd/ | The amount buyers are willing and able to purchase at a particular price over a specified period. |
| inverse relationship/ɪnˈvɜːs rɪˈleɪʃənʃɪp/ | A relationship in which one variable rises when the other falls, other relevant factors held constant. |
| substitution effect/ˌsʌbstɪˈtjuːʃn ɪˈfekt/ | The change in consumption caused by a change in relative prices, considered separately from the change in purchasing power. |
| substitute/ˈsʌbstɪtjuːt/ | Goods or services that can be used in place of each other. |
| income effect/ˈɪŋkʌm ɪˈfekt/ | The change in consumption caused by a change in real purchasing power, considered separately from substitution between goods. |
| movement along/ˈmuːvmənt əˈlɒŋ/ | A change between points on the same demand or supply curve caused by a change in the price shown on its vertical axis. |
| shift/ʃɪft/ | A movement of an entire curve caused by a change in a factor other than the variable plotted on its relevant axis. |
| tastes/teɪsts/ | Consumers' preferences for particular goods, services or characteristics. |
| complement/ˈkɒmplɪmənt/ | Goods or services typically used together, so demand for one is linked to the use of the other. |
Why a sale empties the shelves
- Cut a price and a crowd appears; raise it and the crowd melts away.
- That predictable response is the single most important pattern in a market.
- Get it right and you can predict how buyers react to price, income, and fashion.
- It is called the law of demand 需求定律.
The law of demand
- Demand 需求 is the whole relationship between price and how much buyers want at each price — not one number.
- Quantity demanded 需求量 is just one number: the amount bought at one price.
- The law of demand: price up → quantity demanded down; price down → quantity demanded up. An inverse relationship 反向关系.
- The curve slopes down for two reasons: the substitution effect 替代效应 (switch to cheaper substitutes) and the income effect 收入效应 (your money buys less).
Demand and supply
The demand curve slopes down — a lower price, more is wanted. A change in income or tastes shifts the whole curve.
The law of demand says that, other things equal, when price rises the quantity demanded:
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Price and quantity demanded move in opposite directions — an inverse relationship.
The amount buyers will buy at one particular price is called:
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Quantity demanded is one number; demand is the whole price–quantity relationship.
Movement vs shift
- A change in the good's own price → a movement along 沿曲线移动 the curve (a change in quantity demanded).
- A change in anything else → a shift 移动 of the whole curve (a change in demand).
This distinction wins marks. Only the good's own price moves you along the curve. Income, tastes, or other prices shift it. Mixing these up is the classic exam mistake.
A change in the good's own price causes a movement along the demand curve, not a shift.
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Own price → movement along; every other factor → shift of the whole curve.
What shifts demand — TIPEN
- Tastes 偏好: a good becomes popular → demand shifts right.
- Income 收入: for a normal good, higher income → demand right.
- Prices of related goods: a cheaper substitute 替代品 shifts this good's demand left; a cheaper complement 互补品 shifts it right.
- Expectations of higher future prices → buy more now (right). Number of buyers rises → right.
Match each change to its effect on the demand for coffee.
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Income, substitutes and complements shift the curve; the good's own price only moves you along it.
Two goods used together, like printers and ink, are called ______.
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A rise in the price of one lowers demand for the other.
Select all that shift the demand curve (rather than move along it).
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TIPEN factors shift the curve; the good's own price only causes a movement along it.
Demand is the whole price–quantity relationship; the law of demand makes it slope down (substitution + income effects). The good's own price = a movement along; any other factor (TIPEN) = a shift of the whole curve.
Write from a movement of 4 bowls
- The price of noodles falls from 8 dollars to 6 dollars.
- Quantity demanded rises from 10 bowls to 14 bowls.
The price of noodles falls from 8 dollars to 6 dollars and quantity demanded rises from 10 bowls to 14. Is this a movement or a shift, and by how many bowls does quantity demanded change?
14 minus 10 is 4, and only the good's own price changed.
What happens to demand in this noodle example?
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A lower own price raises quantity demanded along the same curve.