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Allocation of Resources What is demand? Demand is defined as want or willingness of consumers to buy goods and services. In economics willingness to buy goods and services should be accompanied by the ability to buy (purchasing power) and is referred to as effective demand. Types of demand Composite demand: It is when a good is demanded for two or more uses. For example oil may be used to run a car or as a fuel in a factory. Joint demand: It is when two goods are bought together. Mouse is bought with a mouse pad. Derived demand: It is when demand for one good occurs as a result of demand for another. Example, If more goods are made, more labour is needed. Hence demand for labour is derived demand. Law of demand It states that when price increases, the amount demanded will fall and when prices fall, the amount demanded will rise. This phenomenon when plotted on a graph is known as Demand Curve.

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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1266-shifts-of-demand-curve
http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1266-shifts-of-demand-curve
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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1269-changes-in-supply
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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1742-cross-elasticity-of-demand
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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1262-market-economic-system
http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1262-market-economic-system
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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1263-planned-economies
http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1263-planned-economies
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http://www.dineshbakshi.com/igcse-gcse-economics/how-market-works-and-failure/revision-notes/1272-social-cost-and-social-benefit

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