What Do Consumers Want Flashcards
Choice
Resources are scarce, everyone can chose what they want
Depend by level of income
Consumers want
Choice Price Non-price factors Tastes Incomes Substitutes Complements Influences on demand
Substitutes
Products that can be used to replace each other.
If the price of one rises, the demand for the other will rise
Complements
If the price of one rises, the demand for the other will fall
Inferior goods
People buy more of when their incomes fall
Normal goods
Products that are not inferior
Factors aft texting demand : price
When prices fall people generally buy more of the product
Other factors affecting demand
Incomes
Price and availability of substitutes
Price and availability of complements
Tastes and fashions - affected by advertising
Population - increases demand if it is growing
Market change
The quantity supplied responds to changes in demand which cases prices and profits to increase or decrease
Market change
The quantity demanded responds to changes in prices as consumers try to get the best value for the amount they spend
What will influence supply
Prices and costs
Technological change
Innovation
Costs of production
Those payments that are needed in order to create a product and make it available in the market
Product innovation
Refers to the development of completely new product
Process innovation
Uses new technologies to produce existing or similar products at lower cost
Technological change
Uses new scientific knowledge and improved engineering technique to create tooth Noel products and new production methods
