| A | B |
|---|
| Diminishing marginal utility | Less satisfaction with successive consumption. |
| Income effect | Lower price increases purchasing power. |
| substitution effect | Lower price will cause buyers to purchase and to substitute for other products. |
| Determinants of demand | a.k.a. Demand shifters. There are 5 of them. |
| Normal goods | Superior goods whose demand varies directly with income. |
| Inferior goods | Demand varies inversely with income. |
| Substitute goods | Increase in price of one = increase in demand for the other. |
| Complementary goods | Increase in price of one = decrease in demand for the other. |
| Unrelated goods | Change in price of one has no effect on the demand for the other. |
| Change in demand | Not the same as Change in Quantity Demand |
