Economics : Demand
Title: Economics : Demand
Category: /Literature/European Literature
Details: Words: 1466 | Pages: 5 (approximately 235 words/page)
Economics : Demand
Category: /Literature/European Literature
Details: Words: 1466 | Pages: 5 (approximately 235 words/page)
Demand: the quantity of a good or service that consumers are willing and able to purchase at various price levels at a given point in time.
Individual demand: demand of individual consumers
Market demand: demand by all consumers for a g or s.
* Market demand obtained by summing quantities demanded by all individual consumers at various price levels.
Factors effecting market demand:
* the price of the good or service itself: the consumer must decide whether …showed first 75 words of 1466 total…
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…showed last 75 words of 1466 total…amp;gt;Firms and governments must understand price elasticity of demand
Business firms:
*<Tab/>Must understand price elasticity of demand to decide optimal pricing strategy
-<Tab/>if demand relatively elastic- firm knows lowering prices greatly expands volume of sales = ↑ total revenue
-<Tab/>if demand relatively inelastic- firm ↑ price = ↑ total revenue because reduction in sales < price increase