Which of the following is a determinant of demand. The non 2019-01-30

Econ Hw 4 Flashcards

Sellers can use advertising, product differentiation, product quality, customer service, and so forth to create such strong brand images that buyers have a strong preference for their goods. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous. B Price will decrease; quantity cannot be determined. These determinants will alter the demand for goods and services, but only within certain acceptable price ranges. Therefore, individuals demand different products in different climatic conditions. Price normally demands the demand of goods and services. A complement is something that a consumer normally purchases to go along with another product.

10 Determinants of Demand for a Product

The relationship between the income of a consumer and each of these goods is explained as follows: a. Some questions will include multiple choice options to show you the options involved and other questions will just have the questions and corrects answers. Price will rise, and the effect on quantity is ambiguous. Consumer expectations of future prices and income Consumer expectation is important to determine changes in demand. The Prices of Related Goods i.

The Most Important Determinant of the Demand of a Good

Effect of Advertisements: Refers to one of the important factors of determining the demand for a product. D The cost of the good relative to total income. If people expect the price of product X to increase, there will be more demand for that product now. For instance, most of the South Indians are non-vegetarian; therefore, the demand for non- vegetarian products is higher in Southern India. B It is a non-durable as opposed to a durable good.

Multiple Choice Quiz

Effective advertisements are helpful in many ways, such as catching the attention of consumers, informing them about the availability of a product, demonstrating the features of the product to potential consumers, and persuading them to purchase the product. The Price of the Commodity 2. On the other hand, if the consumption of a commodity requires the consumption of another commodity they are called complements. Expectations on income also influence demand. Tastes and Preferences of the Buyer 5. In other words, complementary goods are consumed together.

What Are Four Determinants of Price Elasticity of Demand?

Because everyone expects the prices of houses to drop, everyone is waiting to buy. For example, increase in the prices of petrol would decrease the demand of cars. Climatic Conditions: Affect the demand of a product to a greater extent. Luxury goods are used for the pleasure and esteem of consumers. In such a case, millet and kerosene are inferior goods for the consumer.

Which of the following is not a determinant of the price elasticity of demand for a particular good?

This means that, an increase in money income may cause a person to travel more frequently and in upper classes and may increase his demand for better accommodation. These are called non-economic factors and are the following: a Demographic and sociological factors: Such factors include age, sex, marital status i. The cost of executing a transaction is much lower. The supply curve for saddle shoes will shift right, which will create a shortage at the current price. The Income of the Buyer 4. The need for goods varies by time of year; thus, there is a strong demand for lawn mowers in the Spring, but not in the Fall. If the change will make people want to buy more, it will increase, but if it is a bad change, demand will decrease.

What Are The Non

Essential or Basic Consumer Goods: Refer to goods that are consumed by all the people in the society. Thus, the demand for tea depends not only on its own price but also on the price of coffee, the price of sugar, the price of milk, etc. The income-demand relationship can be analyzed by grouping goods into four categories, namely, essential consumer goods, inferior goods, normal goods, and luxury goods. The same thing is true of motor car and petrol. Imagine hamburgers and hamburger buns, they are complements. Quantity will fall, and the effect on price is ambiguous. An increase in the rate of interest or the price level causes a decline in the cash balances and vice versa the yield on various forms of wealth as used by Friedman in his demand function are discussed below: 1.

What Are The Non

When the economy slows down and consumers have less disposable income, they will spend less, and aggregate demand decreases. If the market for widgets is allowed to adjust, the ultimate result will be: 37 A an increase in price and an increase in the quantity demanded. If buyers believe that the market will change in the future, such as may happen with an anticipated constriction of supplies, this may alter their purchasing behavior now. None of the above is necessarily correct. Permanent income is the expected income flow from total wealth.