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What is meant by term Demand ? It is someone or some organization that comes to the marketplace to purchase goods/services /resources d P Q d What is a Demand Curve? It is a GRAPH of a demand schedule in which, by convention , the relative price is measured along the vertical axis and the quantity measured along the horizontal axis What is the meaning of term DEMAND? It is the maximum quantity demanders would be willing to buy in a market over a particular time period at all possible prices. It refers to the ENTIRE demand schedule What is meant by Quantity Demanded ? It refers to the amount demanded at a single point along a demand curve. That is, Quantity demanders are willing ro buy from a market at a specific time What is the LAW of Demand ? All things being equal, there is an INVERSE relationship between the relative price and the quantity demanded. Simply, when the relative price increase, the quantity demanded decreases What is the meaning of Excess Demand ? This occurs when , at a particular market price, the Quantity supplied by the supplier decreases as the quantity demanded increases. Excess demand is the difference between QD and QS at that price At this time adjustment, the P increases until $1 .At this point, there is no excess demand, and no need for incentive for further price increases If the price is free to increase, when there is excess demand , excess demand will be eliminated by the market forces Competition in the Marketplace based on Price changes(Excess Demand Principle) What is the meaning of the Shift in Demand ? Suppose the drinking age is lowered from 21 to 18. What will happen to the Demand for beer? The Demand for beer will increase because more individuals will enter the market For example, at 1.50 cents