the market: demand

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11 Terms

1

demand

the quanitity of a product bought at a given price over a given period of time

aka what customers are actually able to buy

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2

demand curve

a line drawn on a graph that shows how much of a product will be bought at different prices

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3

feactors affecting demand

  • price of substitutes/ alternatives

  • price of complementary goods

  • changes in consumer incomes

  • changes in fashion tastes and preferences

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4

how do the prices of substitutes affect demand

substitutes can alter the price of the original

based on how good/similar of a substitute it is

the price of the original compared to the price of the substitute

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5

complementary good

goods that are bought together because they are consumed together

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6

prices of complementary goods

the demand of a complementary good is directly portportional to the demand of the original good

if one increases so does the other

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7

consumer incomes

the amount of money earned by people

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8

how do consumer incomes affect demand

as consumer incomes rise the demand for goods rise so they are directly porportional

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9

fashion tastes and preferences

marketing, advertising, branding and consumer demographics these directly influence demand and will affect sales depending on the market

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10

external shocks

factors beyond a firm’s control

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11

examples of external shocks

  • competition

  • government

  • economic climate

  • social and environmental factors

  • seasonality

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