Demand
- Created by: alexialexi
- Created on: 26-12-20 15:04
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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
- a line on a graph that shows how much of a good will be bought at different prices
- 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
- higher income= increase in normal goods
- 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
- structure of the population and its size
- 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
- factors beyond the control of the business
- prices of substitutes
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