Factors Affecting Demand
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Factors that can affect demand include: 1) Consumer income - Demand increases when consumer income rises through higher wages or lower prices for other goods. 2) Consumer tastes - Demand may change when products are successfully marketed or new trends emerge. 3) Substitutes - Demand for one product falls when substitutes become cheaper. Lower butter prices increase demand for margarine. 4) Complements - Related goods see demand rise together; lower DVD player prices boost DVD demand.
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1) Demand is defined as the desire, ability, and willingness to purchase a good or service. It is influenced by factors like price, income, utility, habits, fashion, weather, advertising, taxation, and speculation.
2) The law of demand states that, all else equal, demand decreases when price increases as consumers will purchase less of a good, and demand increases when price decreases as consumers will buy more.
3) For the law of demand to hold true, there should be no changes in consumer income, preferences, prices of related goods, expectations of future prices, or other economic conditions like the quantity of money, taxes, or climate.
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1. Demand is defined as the amount of a good or service consumers will purchase at a given price. The main determinants of demand are price, income, tastes/preferences, and prices of related goods.
2. The law of demand states that, all else equal, demand increases when price decreases and decreases when price increases. Exceptions include Giffen goods, conspicuous goods, and speculative goods.
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Demand and Supply Analysis (Economics) Lecture Notes
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We connect Students who have an understanding of course material with Students who need help.
Benefits:-
# Students can catch up on notes they missed because of an absence.
# Underachievers can find peer developed notes that break down lecture and study material in a way that they can understand
# Students can earn better grades, save time and study effectively
Our Vision & Mission – Simplifying Students Life
Our Belief – “The great breakthrough in your life comes when you realize it, that you can learn anything you need to learn; to accomplish any goal that you have set for yourself. This means there are no limits on what you can be, have or do.”
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Demand and Supply Analysis (Economics) Lecture Notes
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Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Running head: Microeconomic Analysis on The Procter and Gamble Company 1
Microeconomic Analysis on The Procter and Gamble Company 7MILESTONE 1
Abstract
The Procter and Gamble Company is an American multi-national consumer goods corporation that was found in 1837. The company makes many different products and have been structured into ten different categories. The category that I will be doing my microeconomic analysis on is Family Care because of the product I chose to elaborate on. The analysis will be on Procter and Gamble’s paper products Bounty, Charmin and Puffs. It will show what key factors of supply and demand affect the production of the product of the company.
Keywords: Procter and Gamble, demand, supply, analysis, product
Milestone One Part One
Pulp is one of the main resources used to produce the paper towels and tissue. “Procter & Gamble today announced it's planning to raise prices on a lot of its products, including Bounty paper towels and Puffs tissues. One reason for those increases? P&G is having to pay a lot for wood pulp, which is basically what paper towels, diapers and toilet paper are made from.” (Kim,2018) The price of pulp is high in demand and the price of it increased. “If the price of the commodity rises, then it is less demanded by the people, because people finds less utility in the product, and at that much price they can buy the other products having more utility for them. In this way, demand decreases while the supply increases.” (Says, 2017) Due to a high demand in pulp, Procter and Gamble had to increase the price of their products. Even though Procter and Gamble had to increase the price of their products the demand for their products did not decrease as much. There products were still in competition with their competitors. “Price elasticity is a measure of how consumers react to the prices of products and services. Normally demand declines when prices rise, but depending on the product/service and the market, how consumers react to a price change can vary.” (What is price elasticity)“In 2014, the average consumer unit in the United States spent approximately 124 U.S. dollars on paper towels. A survey by Harris Interactive, which was conducted online in November 2014, revealed that 44 percent of Americans purchased name-brand paper products. Bounty Select-A-Size was the second leading paper towel brand in the United States (behind private label) in 2015 with a sales share of over 24 percent. Out of the top ten paper towel brands of 2015, Procter & Gamble (P&G) owned four of them; with the vendor generating sales of over 2.15 billion U.S. dollars.”(Sales)
Non-Price Factors: Demand
Procter and Gamble use advertising as one of the non-price factors that affect the demand. “Branding. 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 non-price determinants of d.
Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Running head: Microeconomic Analysis on The Procter and Gamble Company 1
Microeconomic Analysis on The Procter and Gamble Company 7MILESTONE 1
Abstract
The Procter and Gamble Company is an American multi-national consumer goods corporation that was found in 1837. The company makes many different products and have been structured into ten different categories. The category that I will be doing my microeconomic analysis on is Family Care because of the product I chose to elaborate on. The analysis will be on Procter and Gamble’s paper products Bounty, Charmin and Puffs. It will show what key factors of supply and demand affect the production of the product of the company.
Keywords: Procter and Gamble, demand, supply, analysis, product
Milestone One Part One
Pulp is one of the main resources used to produce the paper towels and tissue. “Procter & Gamble today announced it's planning to raise prices on a lot of its products, including Bounty paper towels and Puffs tissues. One reason for those increases? P&G is having to pay a lot for wood pulp, which is basically what paper towels, diapers and toilet paper are made from.” (Kim,2018) The price of pulp is high in demand and the price of it increased. “If the price of the commodity rises, then it is less demanded by the people, because people finds less utility in the product, and at that much price they can buy the other products having more utility for them. In this way, demand decreases while the supply increases.” (Says, 2017) Due to a high demand in pulp, Procter and Gamble had to increase the price of their products. Even though Procter and Gamble had to increase the price of their products the demand for their products did not decrease as much. There products were still in competition with their competitors. “Price elasticity is a measure of how consumers react to the prices of products and services. Normally demand declines when prices rise, but depending on the product/service and the market, how consumers react to a price change can vary.” (What is price elasticity)“In 2014, the average consumer unit in the United States spent approximately 124 U.S. dollars on paper towels. A survey by Harris Interactive, which was conducted online in November 2014, revealed that 44 percent of Americans purchased name-brand paper products. Bounty Select-A-Size was the second leading paper towel brand in the United States (behind private label) in 2015 with a sales share of over 24 percent. Out of the top ten paper towel brands of 2015, Procter & Gamble (P&G) owned four of them; with the vendor generating sales of over 2.15 billion U.S. dollars.”(Sales)
Non-Price Factors: Demand
Procter and Gamble use advertising as one of the non-price factors that affect the demand. “Branding. 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 non-price determinants of d.
Lecture 2 Supply, Demand, and Market Equilibrium.ppt
This document provides an introduction to the economic concepts of supply, demand, and market equilibrium. It includes definitions of demand and supply, how to represent them graphically with demand and supply curves, and how the interaction of supply and demand determines the equilibrium price in a market. Key points covered include: the downward slope of the demand curve and upward slope of the supply curve; factors that can cause a shift in demand or supply; how surpluses and shortages occur at prices above or below the equilibrium price; and how markets work to eliminate surpluses and shortages over time through price adjustments.
SupplyandDemand.ppt
This document provides an introduction to the economic concepts of supply, demand, and market equilibrium. It includes definitions of demand and supply, how to represent them graphically with demand and supply curves, and factors that can cause the curves to shift. The key points covered are:
- Demand is based on willingness and ability to purchase, represented by a downward sloping demand curve. The curve can shift from changes in income, tastes, expectations, or prices of related goods.
- Supply is based on willingness to produce and sell at different price levels, represented by an upward sloping supply curve. The curve can shift from changes in costs of production, technology, or prices of other goods.
- Where the demand and
Supply and Demand in grade12 student PPT.pdf
Introduction to Demand
We buy products for their utility- the pleasure, usefulness, or satisfaction they give us.
What is your utility for the following products? (Measure your utility by the maximum amount you would be willing to pay for this product)Do we have the same utility for these goods?Introduction to Demand
One reason the demand curve slopes downward is due to diminish marginal utility
The principle of diminishing marginal utility says that our additional satisfaction tends to go down as we consume more and more units.
To make a buying decision, we consider whether the satisfaction we expect to gain is worth the money we must give up.
Changes in Demand
Demand Curves can also shift in response to the following factors:
Buyers (# of): changes in the number of consumers
Income: changes in consumers' income
Tastes: changes in preference or popularity of product/ service
Expectations: changes in what consumers expect to happen in the future
Related goods: compliments and substitutes.
BITER: factors that shift the demand curve
Changes in Demand
Prices of related goods affect on demand
Substitute goods a substitute is a product that can be used in the place of another.
The price of the substitute good and demand for the other good are directly related
For example, Coke Price
Pepsi Demand
Complementary goods a compliment is a good that goes well with another good.
When goods are complements, there is an inverse relationship between the price of one and the demand for the other
For example, Peanut Butter Price
Jam Demand
Introduction to Supply
Supply refers to the various quantities of a good or service that producers are willing to sell at all possible market prices.
Supply can refer to the output of one producer or to the total output of all producers in the market (market supply).Introduction to Supply
• A supply schedule can be shown as points on a graph.
• The graph lists prices on the vertical axis and quantities supplied on the horizontal axis.
• Each point on the graph shows how many units of the product or service a producer (or group of producers) would willing sell at a particular price.
• The supply curve is the line that connects these points.
Introduction to Supply
As the price for a good rises, the quantity supplied rises and the quantity demanded falls. As the price falls, the quantity supplied falls and the quantity demanded rises.
The law of supply holds that producers will normally offer more for sale at higher prices and less at lower prices.Introduction to Supply
• The reason the supply curve slopes upward is due to costs and profit.
• Producers purchase resources and use them to produce output.
• Producers will incur costs as they bid resources away from their alternative uses.Introduction to Supply
• Businesses provide goods and services hoping to make a profit.
Profit is the money a business has left over after it covers its costs.
Businesses try to sell at prices high enough to cover it
Demand Analysis
1. Demand refers to how much of a good or service is desired by buyers at various prices and is determined by factors like price, income, tastes, and expectations of buyers.
2. The relationship between price and quantity demanded is known as the demand curve, which slopes downward as quantity demanded decreases when price increases.
3. A shift in the demand curve occurs when a change in a determinant of demand causes a different quantity to be demanded at each price, while movement along the curve refers to changes in quantity demanded due to price changes with other factors held constant.
d
1) Demand refers to how much of a good or service is desired by buyers at various prices. It is represented by a demand curve showing the relationship between price and quantity demanded.
2) Demand is determined by factors such as price, income, tastes, prices of substitutes and complements, and expectations about future prices and income.
3) The law of demand states that, all else equal, quantity demanded is inversely related to price - as price increases, quantity demanded decreases, and vice versa.
1.3 shifts in_demand [e_doc_find.com]
This document discusses factors that cause movements along and shifts in demand curves. It defines different types of goods like substitutes, complements, inferior goods, and ostentatious goods. Specific factors are given that can cause demand for a good to increase or decrease, such as changes in income, prices of substitutes or complements, and preferences. Exceptions to the standard inverse price-demand relationship are also discussed, like Giffen goods and speculative demand.
Demand ch. 4
The document discusses the law of demand and factors that can cause a shift in demand. It explains that according to the law of demand, as price increases, quantity demanded decreases, and as price decreases, quantity demanded increases. It then lists several factors that can cause the entire demand curve to shift, representing a change in demand: consumer income, substitutes, expectations about the future, consumer tastes, complements to the product, and changes in the number of consumers or market size.
Demand
The document discusses the law of demand and factors that can cause shifts in demand curves. It explains that according to the law of demand, as price increases, quantity demanded decreases, and as price decreases, quantity demanded increases. It then defines three reasons for this pattern: diminishing marginal utility, the income effect, and the substitution effect. It provides examples of how changes in these and other factors, like prices of substitutes or complements, can cause the demand curve to shift, representing a change in demand.
10 consumer skills
Basic economic concepts like supply, demand, costs of production, and competition impact product prices and consumer spending. Purchase decisions are informed by weighing marginal costs versus benefits using decision models. Conspicuous consumption aimed at impressing others can lead to financial problems if it causes spending beyond one's means. Advertising and marketing influence consumer demand and decision-making in the global marketplace.
Supply and Demand
This document provides an overview of supply and demand concepts including:
- Demand is determined by consumers' willingness and ability to purchase goods at different price levels, while supply is determined by producers' willingness to provide goods at different price levels.
- The law of demand states that as price increases, quantity demanded decreases, while the law of supply states that as price increases, quantity supplied also increases.
- Demand and supply curves graphically represent these relationships, with demand curves sloping downward and supply curves sloping upward.
- Factors like income, population, tastes, prices of substitutes and complements can cause demand to shift, while costs of production and technology can cause supply shifts.
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Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Running head Microeconomic Analysis on The Procter and Gamble Com.docx
Lecture 2 Supply, Demand, and Market Equilibrium.ppt
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