Demand | A-Level Economics Notes
These revision notes cover everything you need to know about Demand for A-Level Economics. They're designed for students studying AQA A-Level Economics, Edexcel A-Level Economics, and Edexcel International A-Level Economics. Written by Jaisul Naik, UCL Economics graduate and A-Level Economics tutor since 2017.
What is demand?
Demand is the number of goods and services that consumers are willing and able to buy at each given price.
Why is the demand curve downward sloping?
The demand curve is downward sloping (inverse relationship)
At higher prices, quantity demanded is lower because goods and services are less affordable so less people are willing and able to buy
What is diminishing marginal utility?
Diminishing marginal utility theory states that when individuals consume an extra unit of a good or service, there is a decrease in the extra satisfaction the consumer gains
Why is the supply curve upward sloping?
The supply curve is upward sloping (positive relationship)
At higher prices, quantity supplied is higher because there is a greater incentive for firms to sell due to the potential to make higher profits
How do you describe a right shift in demand?
Demand shifts to the right when there is an increase in the quantity of goods and services that people are willing and able to buy at each price point.
This is caused by the non-price factors of demand (PIRATES)
What are the factors that shift the demand curve?
- Non-price factors
- PIRATES
- Population
- Incomes
- Related goods
- complementary goods
- substitute goods
- Advertising
- Trends (new fashion etc.)
- Expectations (toilet roll during covid)
- Seasons (ice cream/ holiday packages)
Summary questions
- what is demand?
- why is the demand curve downward sloping?
- what is the law of diminishing marginal utility?
- how do you describe a right shift in demand?
- what are the factors that shift the demand curve?
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