| A | B |
|---|
| demand | the quantities of something a person desires and is willing and able to buy at different possible prices |
| price elasticity | describes how much a change in price affects the quantity demanded |
| diminishing marginal utility | The point reached when the next item consumed i sless satisfying than the one before |
| change in demand | people want to buy less of a product at all possible prices |
| price effect | people want to buy mor of a product when its price falls |
| market demand | the sum of all individuals' demands in a given market (aggregate) |
| substitute good | something used in place of a particular product |
| complementary good | itms that people typically use together, such as peanut butter and jelly |
| ceteris paribus | all other things held constant, all things being equal |
| inelastic demand | Demand for a good or service that does not increase or decrease in response to changes in price |
| elastic demand | Demand for a good or service that decreases when the price of the good or service increases, and increases when the price decreases |
| income effect | more money we make, the more money we’ll spend |
| substitution effect | consumers always switch from spending on higher-priced goods to lower-priced ones as they struggle to maintain their living standards in face of rising prices |
| law of demand | price effect |
