Effective demand refers to the willingness and ability of consumers to purchase goods at different prices. It shows the amount of goods that consumers are actually buying – supported by their ability to pay. Effective demand excludes latent demand – where the willingness to purchase goods may be limited by the inability to afford it …
A look at the different factors affecting the price of oil in both short term and long. Readers Question: I’m trying to update myself on what’s happening with oil prices at the moment (partly to prepare myself for uni interviews) but I’m finding very conflicting articles, such as: Article warning of oil rising to $150 …
The demand curve shows the amount of goods consumers are willing to buy at each market price. A linear demand curve can be plotted using the following equation. Qd = a – b(P) Q = quantity demand a = all factors affecting QD other than price (e.g. income, fashion) b = slope of the demand …
Definition of composite demand Demand for a good that has multiple different uses. e.g. People may demand oil because it can be used to create either petrol or plastics. Examples of composite demand People may demand wheat for producing bread, biofuels or feeding livestock. Land can be used for farming or building houses. Steel could …
The oil price is determined by supply and demand side factors. Rising oil prices are indicative of rising demand and/or shortages of supply. The oil price is also affected by market speculation. Rising Demand Increasing demand will push up the price of oil. A short-term rise in demand could lead to a significant increase in …
Derived demand occurs when there is a demand for a good or factor of production resulting from demand for an intermediate good or service. Example – mobile phones and lithium batteries The rise in demand for mobile phones and other mobile devices has led to a strong rise in demand for lithium. Lithium is used in …
Movements in the stock market can be quite volatile and sometimes movements in share prices can seem divorced from economic factors. However, there are certain underlying factors which have a strong influence on the movement of share prices and the stock market in general. Generally, shares will be in greater demand when investors have the …
A look at the different economic factors that determine the price of gold Essentially the price of gold is determined by: Supply of gold Demand for use in goods such as jewellery. Speculative demand to hedge against inflation and economic uncertainty. In early August 2011, gold touched $1,716.19. Adjusted for inflation, the record gold price …