Summary
Demand and supply summary unit 1
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get a simple, direct and detailed understanding of demand as well as supply as they go in hand to hand. *EASY to UNDERSTAND*
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Topic:Market
Demand
Theme
1:
Section
1.2
The
Market
What
You
Need
to
Know
• What
is
demand
• Main
factors
affecting
demand
for
a
product
or
service
Introduction
to
Demand
Demand
for
a
good
or
service
is
the
quantity
that
customers
are
willing
and
able
to
buy
at
a
given
price
in
a
given
period
of
time.
The
basic
law
of
demand
is
that
demand
varies
inversely
with
price
–
lower
prices
make
products
more
affordable
for
consumers.
This
can
be
illustrated
by
plotting
a
demand
curve:
Causes
of
Changes
in
Demand
The
main
causes
of
changes
in
market
demand
are:
Price
For
most
(normal)
goods,
a
fall
in
price
should
result
in
an
increase
in
demand
The
extent
of
the
change
depends
on
the
price
elasticity
of
demand
Incomes
As
incomes
rise,
demand
should
normally
rise
However,
for
inferior
goods,
demand
will
fall
as
consumers
choose
better
alternatives
that
are
now
affordable
The
extent
of
the
change
depends
on
the
income
elasticity
of
demand
Fashions,
Demand
for
products
that
are
fashionable
or
trendy
will
experience
Tastes
&
sharp
fluctuations
Preferences
Advertising
&
A
key
purpose
of
advertising
and
branding
is
to
stimulate
demand
Branding
You
look
at
this
in
more
detail
when
you
look
at
branding
and
promotion
External
A
sudden
and
often
significant
change
in
the
external
environment
Shocks
E.g.
a
loss
of
consumer
confidence
in
a
product
or
brand
Seasonal
For
most
products
there
will
be
seasonal
peaks
and
troughs
in
Factors
production
and/or
sales
E.g.
Demand
for
plants
at
garden
centres
is
linked
to
the
planting
season
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