Demand and Factors Influencing Demand

    OCR
    GCSE

    Candidates must analyze the functional relationship between price and quantity demanded, predicated on the assumption of ceteris paribus. Mastery involves distinguishing between extensions/contractions along the demand curve caused by price changes, and shifts of the curve driven by non-price determinants. Analysis must be grounded in utility theory, specifically the law of diminishing marginal utility, to explain the downward sloping nature of the curve. Evaluation requires assessment of the magnitude of shifts and the elasticity of responses in specific market contexts.

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    Objectives
    4
    Exam Tips
    3
    Pitfalls
    3
    Key Terms
    4
    Mark Points

    What You Need to Demonstrate

    Key skills and knowledge for this topic

    • Award marks for accurate diagrammatic representation: axes labeled (Price/Quantity), correct curve labels (D1/D2), and clear indication of equilibrium changes.
    • Credit logical chains of reasoning (AO3) that link a specific factor (e.g., rise in income) to the mechanism of change (increase in purchasing power) and the final market outcome.
    • Differentiate strictly between 'change in quantity demanded' (extension/contraction) and 'change in demand' (increase/decrease).
    • Reward specific application (AO2) where candidates use the context provided (e.g., the market for electric vehicles) rather than generic theoretical statements.

    Marking Points

    Key points examiners look for in your answers

    • Award marks for accurate diagrammatic representation: axes labeled (Price/Quantity), correct curve labels (D1/D2), and clear indication of equilibrium changes.
    • Credit logical chains of reasoning (AO3) that link a specific factor (e.g., rise in income) to the mechanism of change (increase in purchasing power) and the final market outcome.
    • Differentiate strictly between 'change in quantity demanded' (extension/contraction) and 'change in demand' (increase/decrease).
    • Reward specific application (AO2) where candidates use the context provided (e.g., the market for electric vehicles) rather than generic theoretical statements.

    Examiner Tips

    Expert advice for maximising your marks

    • 💡Always draw a diagram for 'Explain' or 'Analyse' questions involving market changes, even if not explicitly asked.
    • 💡Use the acronym PASIFIC (Population, Advertising, Substitutes, Income, Fashion/Tastes, Interest rates, Complements) to recall shift factors.
    • 💡When evaluating, consider the magnitude of the shift or the time lag involved (short run vs. long run).
    • 💡Ensure the distinction between Normal Goods and Inferior Goods is explicit when discussing Income elasticity.

    Common Mistakes

    Pitfalls to avoid in your exam answers

    • Confusing a movement along the curve with a shift of the curve (e.g., stating a price rise shifts demand left).
    • Inverting the relationship between substitute and complementary goods (e.g., arguing that a price rise in petrol increases demand for petrol cars).
    • Drawing diagrams with incorrect axes (swapping Price and Quantity) or failing to label the new equilibrium points.

    Study Guide Available

    Comprehensive revision notes & examples

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    Key Terminology

    Essential terms to know

    Likely Command Words

    How questions on this topic are typically asked

    State
    Calculate
    Explain
    Analyse
    Evaluate
    Discuss

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