Demand | Theme 1 Flashcards
What is demand?
Demand is the amount of goods customers want of a product.
What factors can cause a change in demand?
Factors causing a change in demand include the price of substitutes, disposable income, complimentary goods, substitutes, advertising campaigns, demographics, external shocks, fashion, tastes, preferences, and seasonal factors.
How does the price of substitutes affect demand?
If the price of a product increases, the quantity demanded will be lower as customers will seek alternatives, leading to increased demand for competitors.
How can advertising campaigns impact demand?
If a business runs a big advertising campaign for its products, demand is likely to increase.
How does demographics affect demand?
An increase in population generally increases demand in sectors like retirement homes, as there are more people needing care.
What are examples of external shocks that can affect demand?
Examples of external shocks include a new competitor entering the market, the government raising taxes, and changes in the economic climate.
What role do fashion, tastes, and preferences play in demand?
Fashion, tastes, and preferences can significantly influence the demand for various products.
What are some seasonal factors that affect demand?
Seasonal factors include demand for Easter chocolate, summer fruits, winter clothing, and ski season products.
