Demand Analysis — full notes
Economics · Microeconomics - Demand Analysis
Demand Analysis
1. Definition and the law of demand
Demand is the quantity of a good or service consumers are both willing and able to buy at a given price, in a given period. Law of demand: as price rises, quantity demanded falls, all else held equal.
2. Exceptional demand curves
Giffen goods - inferior staples where a price rise leaves so little income that consumers buy more of the cheap staple. Veblen goods - higher price signals prestige, increasing desirability. Speculative demand - buyers expect price to rise further, so buy now.