explain the factor affecting demand in detail
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Answers
Answer:
The Six Factors of Demand
Income.
Market Size.
Consumer Taste.
Consumer Expectations.
Substitutes.
Complements
Factor 1: Income
A person's ability to buy goods changes as his/her income changes
Factor 2: Market Size
As number of consumers in an area changes, so does the market size
Factor 3: Consumer Taste
Consumers tastes change, products gain and lose popularity
Factor 4: Consumer Expectations
Expectations about future price of items affect individual behavior
Factor 5: Substitutes
Products used in place of each other
Factor 6: Complements
Goods that are used together
What is a negative effect on Income?
When consumers don't have as much money to spend they depend less normal goods and settle for inferior goods.
What is the negative effect of Market Size?
The demand for good change as the market size changes.
What is the negative effect Consumer Taste?
If the consumer changes their taste then the demand for a certain product will decrease.
What is the negative effect on Consumer Expectations?
The expectations of a consumer will determine whether the product fails or prospers
What is the negative effects of Substitutes?
If the price of a substitute product is lower than the any other, the consumers will buy the substitute product
What is the negative effects of Complements?
When the price of a product rises then the product of the complement product will be in demand
What is a positive effect on Income?
When the consumers have more money to spend they their demand for certain products will rise as well
What is a positive effect on Market Size?
The demand will rise if there are more people in a certain area.
What is a positive effect on Consumer Tasks?
The demand for a product will rise if the consumer has desires for it
What is a positive effect on Consumer Expectations?
If a consumer expects a good product they will be willing to go and purchase it
What is a positive effect on Substitutes?
If the price of original product rises then the consumers will buy the substitute product
What is a positive effect on Complement?
A rise in demand of one product will rise the demand of it's complement
Explanation:
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