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  • Demand
    • Def: the quantity of a product bought at a given price over a period of time
    • Demand curve
      • a line on a graph that shows how much of a good will be bought at different prices
        • price= y axis(vertical)
        • quantity= x axis(horizontal)
      • curve slopes down from left to right= inverse relationship between price & quantity
        • price goes up= quantity demanded goes down and price goes down= quantity demanded goes up
      • shift of the line to the left= decrease in quantity
      • shift of line to the right= increase in quantity
    • Factors leading to a change in demand
      • prices of substitutes
        • substitutes= goods that can be bought as an alternative to others, but perform the same function
        • price decreases= quantity increases and demand for product falls
      • prices of complements
        • complementary goods= goods that are purchased together as they are consumed together
        • the products are bought together, therefore demand for a product will be affected by the price of the complements
          • e.g. reduction in price for skiing accessories can encourage more people to go skiing
      • changes in consumer incomes
        • higher income= increase in normal goods
          • normal goods: D rises when income rises and falls when income falls
        • higher income= decrease in inferior goods
          • inferior goods: D falls when income rises and rises when income falls
      • fashions, tastes and preferences
      • advertising and branding
        • if goods are heavily advertised, demand for them is highly to increase
        • branding- giving products a name, term, symbol or design to distinguish from competitors
          • brand recognition is developed along with an increase in sales
      • demographics
        • structure of the population and its size
          • age distribution, gender distribution- more women than men in UK, geographical distribution, ethnic groups
      • seasonality
        • some goods have seasonal demand
      • external shocks
        • factors beyond the control of the business
          • competition, gov(taxes, new laws), economic climate(growing economy/ recession), social and environmentalfactors


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