Demand Flashcards
Demandd definiton
The willingness and abiity to purchase a good or service at a given price in a given period of time
What does a change in price show on a demand curve?
A movement on the demand curve
What do other changes have on a demand curve?
These cause a shift on the demand curve
List 8 factors that lead to a change in demand?
- consumer incomes change
- seasonality
- branding & advertisment
- demographics
- external shocks
- price of complements
- price of subsitutes
- fashion tastes
How can a decrease in the price of a subsitute good affect demand?
A decrease of price in a sub good will increase demand for the sub good and decrease demand for the business. A product with a close sub is more likely to face these changes in demand
How can an increase in the price of a sub good affect demand?
An increase of price in a sub good will decrease demand for the sub good and increase demand for the business. A product with a close sub is more likely to face these changes in demand
How does the price of complements affect the demand?
This is depenent on how inelastic the good or service,
Most likley if the complement price decreases this will increase the quantity demanded of both goods, and vice versa
Change in cnsumer income in response to demand?
Normal goods- and increase in consumer incomes will lead to an increase in quantity demanded
A decrease in consumer incomes will lead to an increase in inferior goods
Whats an inferior good?
Goods which are usually cheaper- eg offbran products
Fashion,tastes and prefernces in response to demand?
This will be very prominent in the fashion industry
A change in consumer trends can either decrease or increase demand dependent on the trend
Advertising and branding in repsonse to demand?
- heavily advertised goods are more likely to inrease in the quantity demanded, explaining large amounts of money spent on advertising
- branding adds value, customers more likley to spend more, helps in recognising brands thus increasing sales
Demographics factors that affect demand?
- age distribution
- gender distribution
- geographical distribution
- ethnic groups
How does the population affect demand?
As the population grows there will be an increase in demand for nearly all goods and services. However, demnd is also affected by the structure of the population as well as its size
How does age distribution affect demand?
The amount of any age group will demand greater quantities of specifc goods and services
The gender distribution affect on demand
If more women than men, higher demand for women products
