1.2.1 Demand Flashcards
1
Q
What is demand?
1
A
- Lvl of interest customers have in a product
2
Q
What are the main factors affecting demand?
6
A
- Price
- Substitutes
- Consumer income
- Demographics
- External shocks
- Seasonal factors
3
Q
How can a rise in price affect demand?
2
A
- ^Price = >effective demand as less people afford it
- ^Price also = perceived ^quality, ^demand
4
Q
What is the benefit of a brand being eternally fashionable?
1
A
- Adds value, ^price, ^prof
5
Q
What are some recent demographic trends in UK?
3
A
- Growing pop of over 60’s
- Rising birth rate
- ^Nb of European immigrants
6
Q
What are some examples of external shocks that may affect demand?
2
A
- Natural disasters (flooding)
- Change in law (sugar tax)
7
Q
What are demand risks?
2
A
- Undiversified demand (firm dependent on 1 product)
- Overtrading
