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In economics, induced demand – related to latent demand and generated demand [1] – is the phenomenon whereby an increase in supply results in a decline in price and an increase in consumption. In other words, as a good or service becomes more readily available and mass produced, its price goes down and consumers are more likely to buy it ...
In economics, supplier induced demand (SID) may occur when asymmetry of information exists between supplier and consumer.The supplier can use superior information to encourage an individual to demand a greater quantity of the good or service they supply than the Pareto efficient level, should asymmetric information not exist.
The demand upon a resource tends to expand to match the supply of the resource (If the price is zero). An extension is often added: The reverse is not true. This generalization has come to resemble what some economists regard as the law of demand – namely, the
Getty Images April is Financial Literacy Month, and our goal is to help you raise your money IQ. In this series, we'll tackle key economic concepts -- ones that affect your everyday finances and ...
Supply chain as connected supply and demand curves. In microeconomics, supply and demand is an economic model of price determination in a market.It postulates that, holding all else equal, the unit price for a particular good or other traded item in a perfectly competitive market, will vary until it settles at the market-clearing price, where the quantity demanded equals the quantity supplied ...
[1] Scarcity is the limited availability of a commodity, which may be in demand in the market or by the commons. Scarcity also includes an individual's lack of resources to buy commodities. [2] The opposite of scarcity is abundance. Scarcity plays a key role in economic theory, and it is essential for a "proper definition of economics itself". [3]
Induced consumption is the portion of consumption that varies with disposable income. [1] When a change in disposable income “induces” a change in consumption on goods and services, then that changed consumption is called “induced consumption”. In contrast, expenditures for autonomous consumption do not vary with income.
Induced demand; Marchetti's constant, a corollary of which is that decreasing congestion may increase the distance people are willing to commute and so increase the traffic burden; Lewis–Mogridge position; Jevons paradox, an increase in efficiency tends to increase (rather than decrease) the rate of consumption of that resource