Consumer' Income Coursework Example | Topics and Well Written Essays - 1000 words

Consumer Income - Coursework ExampleWhen the footing of the orange is $30, consumers are allowing and able to buy 30,000 oranges. As the scathe of the orange decrease to $10 the quantity penuryed increases to 60,000 oranges which are due to the fact that more consumers will be willing to buy that orange. For a linear curve decrease in price is directly proportional to increase in quantity demanded. 7. List the determinants of demand. (6 total) The determinants of demand curve are as follows a) The consumers income b) The price of related goods c) Advertisement d) Consumer price expectation e) Number of consumers in the market f) Taste and preference of consumers 8. Next to each determinant in your list give a real military personnel example of it. Along a demand curve the factors, other than price of the good, are held constant. When these factors change the demand curve shifts either outwards or inward which means that either more or less is demanded at a certain price. An expl anation of these factors is given below 1- The consumers income the effect that income has on the aggregate of a product that consumers are willing and able to buy depends on the type of good. For most goods, there is positive (direct) relationship between a consumers income and the amount of the good that one is willing to buy (Campbell R. McConnell, 2007). The demand for a product will shift outward when the consumers income rises. We waul these types of goods as commonplace goods. For example, the demand for branded clothes increases with the income level. However for some goods the relationship is opposite between income and your demand for a product. These goods are called inferior goods. There demand decreases as income increases. For example, income level increase will cut the demand for second hand cars. 2- The price of related goods A common example could be of bagels and cream cheese. We call these types of goods complements. If the price of a bagel goes up, the law of demand tells us that one will buy fewer bagels. Moreover, as use of cream cheese is gratuitous to bagels, the demand for cream cheese will also fall. When two goods are complementary, there is an inverse relationship between the price of one good and the demand for the other good. On the other hand, some goods are considered to be substitutes for one another. This means that they potentiometer be used as an alternate to each other. all of them would be deferred for the other. For example, Coke and Pepsi are used as substitutes for each other. If price of Coke increase, the demand for Pepsi will increase and if the price of Coke decreases the demand of Pepsi will decrease. This portrays a positive relationship between the price of one good and the demand for the other good. 3- The tastes and preference of consumers It is a less tangible item that can have a big impact on demand. There are certain things that can change ones taste or preferences which last causes people to buy mor e or less of a product. For instance, a person whitethorn have a higher demand for an umbrella on a rainy day than on a sunny day. Another example of it would be endorsements by celebrities. If a celebrity endorses a new product, this may increase the demand for a product. This will change the preference of a consumer and will result in an increase in demand. On the other hand, if a new health study comes out indicating that meat is bad for your health, this may decrease the demand