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Demand - Demand is the quantity buyers are willing and able to buy at a given price in a given period of time. Effective Demand – For demand to be effective a consumer must be both willing and able to buy the good or service. Willing means they want it. Able means they have the money to buy it Demand and Price A change in price causes a movement along a demand curve The Law of Demand – as price falls quantity demanded rises as the good becomes more affordable(ceteris paribus) Conditions of Demand – These are the factors that cause the demand curve to shift position. To remember these use the mnemonic PASIFIC Population – An increase in the population will cause an increase in demand. This will cause the demand curve to shift to the right Advertising – Successful promotional campaigns will mean that people will want to buy more of a product at any price and hence an increase in demand Substitutes (Price Of) – These are goods that can be used instead of each other eg Coke and Pepsi. If Coke cut its price the demand for Pepsi would decrease Income – For most goods (Normal Goods) a rise in income will lead to an increase in demand. For some goods (Inferior Goods) if incomes rise demand may decrease. An example of an inferior good might be bus travel or value goods. Fashion & Trends – More fashionable means more demand Interest Rates – If interest rates rise it will be more expensive to borrow money and this may lead to a decrease in demand Complements – These are goods that are in joint demand. For example if the price of Blue Ray Players fell you might see an increase in demand for Blu Ray Discs