Identify and explain the concept: Amazon experienced surge in demand during Diwali when they offered mega discounts.
Answers
Answer:
Demand function :
It is a mathematical function explains relation between quantity demanded and determinants of demand.
Dₓ = f (Pₓ , Pₙ , Y , T , A , W , S , Po , s₀)
Firstly during Diwali people will purchase new things, we can express it through demand function Dₓ = f (s₀) i.e quantity demand depends upon Sociological factors like family , locality , occasions festivals etc
generally on festivals the demand for some commodities increases.
As amazon is also offering mega discounts, we can express it through demand function Dₓ = f (Pₓ) i.e quantity demand inversely related to price
is amazon reduces price of commodity X then demand for commodity X will increase
Amazon now being one of the biggest multinational E-Commerce platforms offers various sales to attract the customers and increase its sales.
It was founded by Jeff Bezos as an online Marketplace for books.
Amazon offers various sales throughout the year and which helped them to be one of the most powerful and influential brands in the world.
By offering huge discounts on various products they attract the customers and there is an increase in the quantity demanded.
Various people who are not very much interested in the products also buy the products when the price goes so low.
It is a very simple economic concept that when the price of a product goes down the demand increases.