Buisness chp29

• • All consumer hsve a limited income no matter how much they esrn or how much wealth they have
  • Consumers have many needs and wants so they must make choices when Deciding what needs and wants they want to satisfy
  • Most consumers make a rational decision about what to spend there money on
• Impact of price

  • Price is the buggest factor thst affects which goods and servuces consumers choosebsd they hsve limited income
  • When a consumer buys goods and services st a cheaper price this means they csn satisfy more of their needs and wants with the dame level of incime
• Demand: the quantity of units of a particular product or srrvicr that consumers are willing to buy at s psrticular price
• • Law of demand states that as the prices of a good or service increases. The quantity frmanded will decrease
• 2 types of demand

  Individual demand: the quantity of a product or service that 1 cinsumer is prepared to purchase st a particulsr price

  Market demand: total quantity of a product or service that all consumers in a particulsr place are prpared to purchase
• A can of fizzy frink increase by 30c , the quantity demanded will decrease
• If the price of a product or service rises demand will decrease because :

  1. Some consumers can no longer afford it
  2. Swit h to an alternative brand eg. Clsrince to essence
  3. Not worth the money eg. Stanley
• If tue price of a product or service efalls , demand will rise because :

  1.comsimers can afford it

  Now worth the moeny
• Exceptions of the law of demand :

  1. Price for life threatening disease increases , demand will facll as the product must be purchase regardless of price eg. Insulin for diabetes
• 1. If there is only one supplier of a product egm larnód èireann
  2. If the oroduct is addictive eg. Ciggs
• Supply : the quantity of goods or servucrs that suppliers are willing to sell at a particulsr price
• Law of supply states that as the quantity of a good or srvice increase the quantity supplied will increase / cause they want too mske a profit
• If the price of a product or sevuce rises , supple will usaually rise csuse :

  • New producers and suppliers will enter the market, as they see and oppurtunity to make profit
  • Exsisting producers snd suppliers will supple more to increase their profits
• If the price of the product or service falls , supply will usually fall because :

  • Some producers and suppliers will leave the market. As there is a pot enough profit to be made
• 1. Income - demand will increase and curve will move to left
  2. Population - demand will increase and curve will move to the right
  3. Advertising- demand will incrwade and curve will move to the left
  4. Fashion - demand will increase and move to right
  5. Price of substitute products - demand will decrease curve will move to left
  6. Interest rates - demand will decrease curve will move to right
  7. Peice of complentsry goods - demand will increase and curve will move right
• Comolenmentary goods are goods that are in jount demand . If you buy one , there will be demsnd for the other
• • If the supply curve shifts to the right , supply has increased
  • If the supply curve shifts yo the left , supply has decreased
• Factors affecting the supply curve :

  • Technology
  • Costs of production
  • Weather
  • Productivity
  • Numbers of suppliers the market
  • Taxes
  • Subsides ( grants frim coutry)