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
demand curve
a line drawn on a graph that shows how much of a product will be bought at different prices
feactors affecting demand
price of substitutes/ alternatives
price of complementary goods
changes in consumer incomes
changes in fashion tastes and preferences
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
complementary good
goods that are bought together because they are consumed together
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
consumer incomes
the amount of money earned by people
how do consumer incomes affect demand
as consumer incomes rise the demand for goods rise so they are directly porportional
fashion tastes and preferences
marketing, advertising, branding and consumer demographics these directly influence demand and will affect sales depending on the market
external shocks
factors beyond a firm’s control
examples of external shocks
competition
government
economic climate
social and environmental factors
seasonality