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| demand | the amount of a good or service that consumers are willing and able to buy at various prices during of a given period. |
| quantity demanded | the amount of a good or service that consumers are willing able to purchase at a particular price. |
| law of demand | the principle that all other factors being equal, consumers will purchase more of a good at lower prices and less of a good at higher prices. |
| purchasing power | the amount of income that people have available to spend on goods and services. |
| income effect | the effect that a change in an item price has on consumers’ ability to purchase goods. |
| substitute effect | consumers’ tendency to substitute a lower-priced good for a similar, higher priced one. |
| diminishing marginal utility | the natural decreases in the utility of a good or service as more units of it are consumed. |
| demand schedule | a table that shows the level of demand for a particular item at various prices. |
| demand curve | a graphic representation of a demand schedule, showing the relationship between the price of an item and the quantity demanded during a given period, with all other things being equal. |
| determinant of demand | a nonprime factor that influences the amount of demand for a good or service. |
| substitute good | a product that purchasers use in place of another product, particularly if the price of the other product rises. |
| complementary good | a good that is commonly used with another good and for which demand increases when the demand for the related good increases. |
| elasticity of demand | the degree to which changes in the price of a good or service affect quantity. |
| elastic demand | the situation that exists when quantity demanded changes greatly in response to a change in price. |
| inelastic demand | the situation that exists when quantity demanded changes only slightly or not at all in response to a change in price. |
| total revenue | a business’s total income; sometimes called total receipts. |
