1.2.1 demand

Question 1

What is the definition of demand?

Answer 1

Demand is the quantity that customers are willing and able to buy at a given price in a given period of time.

Question 2

How can demand be affected by changes in price of substitutes?

Answer 2

If a substitute’s cost increased by a huge amount, then demand for a particular brand would rise.

Question 3

How can demand be affected by changes in consumer incomes?

Answer 3

A higher income can lead to increased demand for expensive products.

Question 4

How can demand be affected by fashion, preferences and taste?

Answer 4

Demand for a product relies on what the consumer wants.

Question 5

How can demand be affected by advertising and branding?

Answer 5

Advertising encourages consumers to be loyal and repeatedly purchase the product, stopping demand from falling.

Question 6

How can demand be affected by demographics?

Answer 6

Changes in population can lead to changes in demand.

Question 7

How can demand be affected by external shocks?

Answer 7

External shocks like the threat of war, extreme weather, or diseases can affect demand.

Example: COVID-19 led to high demand for toilet paper.

Question 8

How can demand be affected by seasonality?

Answer 8

Demand can change throughout the year.

Example: Demand for sunglasses increases in summer.